"Being unable to remortgage means some households will roll onto a lender’s SVR rate, and, over the years, could lose out on thousands of pounds in higher interest charges."
More than two-fifths (41%) of households unable to remortgage said their application was rejected because they had lost their jobs, and one-third (32%) said it was because they had been furloughed. A quarter (26%) of homeowners thought their application was rejected because of a salary cut.
One in five (19%) first-time buyers tried to buy a property only to see the deal fall through, compared to 14% who successfully bought a home. When asked why the transaction did not complete, a quarter (23%) said their provider reduced their initial loan-to-income offer, 18% said their mortgage provider had increased their initial interest rate, and 18% claimed their mortgage lender asked for a larger deposit than originally required.
The research found that the original stamp duty holiday deadline of March 31st also played a significant role in property transactions falling through, affecting 21% of first-time buyers and 28% of homeowners. However, as announced in the Budget, the stamp duty holiday has been extended until the end of June, with a three month taper, which nearly two-thirds (65%) of first-time buyers and three-quarters of homeowners (75%) believe will benefit them.
Mark Gordon, director of mortgages at comparethemarket, commented: “The pandemic does not yet appear to have had the decimating impact on house prices which many initially predicted; In fact, three-quarters (75%) of homeowners are confident they will sell their homes at the asking price. However, this does not mean that it is easy to get on, or move up, the property ladder.
"Household finances have been put under severe strain this past year and many families have found themselves in a more precarious position when it comes to their jobs and income.
“Being unable to remortgage means some households will roll onto a lender’s SVR rate, and, over the years, could lose out on thousands of pounds in higher interest charges.”
