First-time Buyers

Struggling borrowers turn to smaller lenders

Adam Williams
Written By:
Adam Williams

Would-be mortgage borrowers who have found it difficult to obtain finance on the high street are increasingly turning to smaller lenders.

Independent mortgage broker Private Finance said many borrowers had found it difficult to take out a loan from major banks since the Mortgage Market Review (MMR) rules were introduced last year.

However, smaller lenders had been able to react quickest to the market changes and had adapted their criteria.

Struggling buyers often needed bespoke products and specialist financial guidance, the firm said.

This can include retired, self-employed, contract workers, expatriates or first-time buyers looking for higher loan-to-value mortgages.

Simon Checkley, managing director of Private Finance, said many borrowers were left on higher rates as they were unable to remortgage to a better deal.

“The unintended consequences of MMR have left thousands of borrowers trapped in their homes and unable to move or paying higher Standard Variable Rates, when they could be moving home or accessing some exceptional deals by remortgaging whilst we remain in a low interest rate environment,” he said.

“The good news is that we are in a much better position to help, as a number of small regional building societies have now tailored  their criteria to accommodate specific groups such as the retired, expatriates and self-employed.”

He added: “We applaud the work of these lenders who have responded positively to market conditions, supporting brokers in their mission to cater for these niche areas of the market. We hope that with increasing understanding of the impact of current guidelines regulators might further support more lenders who will be able to follow suit.”