20th March 2015
First-time buyers may have been givens a boost in the Budget with the introduction of the Help to Buy ISA but would-be homeowners are facing a bigger battle; getting a mortgage.
A survey by HomeOwners Alliance reveals getting a mortgage or remortgaging is the biggest housing concern in the UK, with nearly three-quarters, 72%, believing this is a serious problem.
Tougher mortgage rules brought in following the ‘mortgage market review’ last year, which aimed to prevent a return to reckless lending by banks, have led to a drop in mortgage agreements.
The report said mortgage approvals have slowed sharply in recent months and puts homebuyers who need a mortgage at a disadvantage to cash buyers.
The problems of mortgages is affecting everyone across all age groups, socio-economic groups, and every part of the country, said the report.
However, those who are most likely to say it is a problem and first-time buyers – where 78% say it is a serious problem.
Those at the bottom of the ladder who want to buy a second home are also struggling, with 78% of those with properties worth less than £125,000 and 67% of those with properties worth £350,000 say it is a serious problem.
Divorced and separated people and those with interest-only mortgages are also more likely to find the mortgage market difficult to access.
Paula Higgins, chief executive of the HomeOwners Alliance, said: ‘Despite all the talk of help, people from all walks of life say that getting a mortgage is a major hurdle to getting on the property ladder.
‘This is another body-blow to those aspiring to own their own home, or those hoping to move up the property ladder.’
Higgins said the country had gone ‘from one extreme to another’, with mortgages too easy to get before the crisis and too difficult to get now.
‘With a desperate shortage of houses and sky-high house prices, for many their mortgage difficulties will be the nail in the coffin of their dream of owning a home,’ she said. ‘
‘We hear increasing numbers of stories of people who not only have had to pull out of buying their home but also families who are trapped because they are denied the opportunity to remortgage even with a good payment history.
‘Banks, building societies and regulators need to apply some common sense by ensuring the new rules are proportionate and applied sensibly.’