Nearly a third of adults in the UK who unsuccessfully applied for a mortgage said they were first refused by a bank before being able to successfully secure a loan through a broker, a new study revealed.
Commissioned by Countrywide, the research by YouGov polled 2,000 adults in the country to find out the key barriers preventing housing market recovery.
According to 29 percent of respondents, one of the major causes of mortgage application rejection was insufficient income, while 24 percent stated a low credit score. Notably, around 10 percent said their application was rejected because they are self-employed.
Moreover, 18 percent of borrowers aged 25 to 34 said they couldn’t apply for a loan as they were unable to afford the instalments. Meanwhile, deposit affordability is a barrier to 45 percent of adults aged 18 to 24 and 41 percent aged 25 to 34.
“More appropriate credit is urgently required in the housing market, but lending volumes for house purchases are only one third of what they were five years ago,” said Grenville Turner, Chief Executive at Countrywide.
“Banks need to be encouraged to lend at more favourable rates, with the introduction of higher loan to value mortgage products, to enable prospective buyers with a deposit of 10 percent or even five percent get on the property ladder.”
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