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Mortgage access still barrier to home hunters
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Only 12% of UK adults believe that access to mortgages has improved during the past 5 years, despite recent measures to attempt to make the mortgage market more accessible.
This represents a substantial drop from the 29% recorded in similar research conducted by Precise Mortgages at the same time last year.
Drops
Despite the negativity surrounding mortgage access, the report suggested improvements in other issues facing potential homeowners. In the last 12 months, UK renters said that saving for a deposit, locating an affordable property and getting a mortgage approved are less of a barrier to owning their home than in 2014.
This said, 49% of would-be homeowners questioned said that mortgage rates favour only those with large deposits. 36% said that they felt mortgages were too difficult to obtain for first-time property purchasers.[1]
76% of renters aged between 18 and 24 said that saving enough for a deposit was that main concern over buying a home. 67% said that finding an affordable home was the greatest barrier.[1]
Affordability
The average cost of a home in the UK is now well above £200,000 and with house price inflation to hit 6% this year, affordability is likely to be the largest barrier for first-time buyers looking to get onto the property ladder.
However, 41% of people renting between 18-24 age bracket still have hopes of buying their own property during the next 5 years. This demographic is different in the 45-54 bracket, with just 14% of renters believing they will own in the same period. The majority (67%) in this age bracket said they had no aspirations of becoming a homeowner.[1]
Alan Cleary, managing director of Precise Mortgages, said that, ‘prospective home buyers are feeling more positive about their ability to save and find an affordable property, but with consumer sentiment towards mortgage accessibility falling in the last year, the industry has a vital job to do in reassuring prospective home owners.’[1]
Mortgage access still barrier to home hunters
Equality
Cleary went on to say that, ‘the mortgage industry should serve prospective homebuyers and we must dispel the belief that lenders continue to favour large deposits and are unforgiving of those with blemishes on their credit record.’[1]
‘There are specialist lenders in the market ideally placed to help navigate the obstacles potential home buyers face, but there is still more to be done across the wider industry. Ensuring that all viable homeowners have access to mortgage products should be the aim of the industry as a whole,’ he concluded.[1]
[1] http://www.propertywire.com/news/europe/mortgage-lending-uk-homes-2015101511096.html
