Survey shows potential borrowers alienated by mortgage process
March 6, 2024 by Heidi
Borrowers
A new survey carried out by a UK mortgage lender has found that two out of every five potential first-time homebuyers are being put off trying to get a loan due to the processes involved.
Perenna conducted this survey and it spoke to over 1,000 people who would like to buy a home. The results show that 62% of those who want to buy for the first time are finding it hard to secure a loan that covers the cost of their chosen property.
The region of the UK where this situation is most pronounced is London. Average prices across the capital are 34% above those of other parts of the country. When it comes to people trying to buy a home in London, 65% could not get a big enough mortgage to meet the property valuation.
This is leading more people to delay buying to focus on earning enough for a deposit. In turn, that means they are also delaying marriage and having children. Talking to Mortgage Solutions, Perenna CEO Arjan Verbeek stated that it was unfair that young people were forced to put their lives and dreams on hold in this way due to affordability.
He then added:
“Seeing mortgage payments shoot up for millions of people because of how traditional mortgages work will, of course, put off many would-be homebuyers. We need to change this trajectory urgently.”
One solution that mortgage advisors with CeMAP training can propose is longer-term fixed rate mortgages to protect first-time buyers against steep repayment rises.
Written by
Heidi
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