Consumers doubt the mortgage market
Three in five (60 percent) UK adults believe they would find it hard to get a mortgage in today’s market, according to a new study.
Masthaven Bank, a challenger bank, is calling on the UK mortgage market to better meet the needs of modern homebuyers in its report of the study Game of Loans.
The study found both would-be and existing homebuyers are unsure if lenders would support them in getting a future mortgage.
Published this week (August 21) the study surveyed around 2,000 UK adults during the first half of this year. It found 65 percent of respondents believe getting a mortgage is about box ticking and not the reality of someone’s situation.
It also found that around 80 percent of respondents believe lenders should try to better understand homebuyers’ individual circumstances. Whilst nearly 75 percent feel that meeting repayment criteria should determine mortgage eligibility, not age.
Jon Hall, managing director of Masthaven, said: “Just as homes have kerb-appeal to buyers, it seems people have a perceived sense of their own mortgage-appeal to lenders.
“Our report highlights how many people believe they have low or no appeal to mortgage lenders; they have little faith in the market.”
Game of Loans looked at a range of borrowers including the self-employed, parents and both older and younger borrowers. Masthaven suggested that, despite new mortgage regulations providing a more stable framework, lenders have not adapted their approaches to cope with evolving financial lives.
The bank is urging lenders to look closer at individual borrowers’ lives, so they can create products and processes that are fit for modern life.
Masthaven said lenders need to adaptaffordability models to reflect the concept of self-employed income.
As for younger borrowers, the bank said innovation is needed to help first-time buyers onto the property ladder. It referenced “unlocking intergenerational wealth” by helping grandparents and parents with equity in their homes support their families.
Hall said: “As a bank we need to make sure our application of the affordability rules are revisited regularly, to check hard-working householders are not being excluded from the mortgage market.”
The research also found that 61 percent of respondents predict that the shortage of affordable homes will increase in the next five years.