A third of prospective homebuyers have been denied a mortgage
Almost a third (32%) of prospective homebuyers have been denied a mortgage, while 45% have been gazumped, according to Market Financial Solutions.
The bridging lender found that more than half (52%) of current homeowners want to take advantage of the Stamp Duty holiday to purchase a new property, but are concerned about their ability to get a mortgage.
And 46% of people who have bought or tried to buy a property in 2020 have encountered significant delays or complications when applying for a mortgage.
These issues in accessing mortgages are preventing prospective homebuyers in the UK from taking advantage of the Stamp Duty holiday. And a third of UK adults say they would consider alternative finance options like bridging loans.
Paresh Raja, CEO of MFS, said: “The Stamp Duty holiday has already had a positive effect on the UK property market, sparking much more activity among buyers and sellers. However, today’s research shows that many prospective homebuyers are unable to take advantage of this initiative.
“Frustratingly, this is often due to the challenges of securing a mortgage, which are beyond buyers’ control. Many banks are treading carefully and, as a result, applications are taking longer to process and there is a higher chance of an application being rejected. This is putting property chains at risk of collapsing.
“At this point in time, it is important that lenders keep lending – they must ensure buyers have access to the finance needed to complete on a purchase. Failing this, the Stamp Duty holiday will only have a limited effect.”