KSEYE research, which highlights feedback of over 750 respondents, all of whom had applied for mortgages in the past five years, found that 32% of mortgage applicants faced at least one rejection from a lender and 44% were rejected due to having an irregular income rather than a monthly pay-check (30% were self-employed).
33% of those who were rejected for a mortgage already owned another mortgaged property at the time and 50% of all UK mortgage customers relied on a broker to find their loan.
59% feel mortgage providers need to be more flexible in assessing applications to take into account an individual’s full financial circumstances.
The bridging lender's survey of 752 UK adults, also found that 36% of those who were turned down by a lender said that they were never told why their application had been unsuccessful. 46% had received an agreement in principle from a mortgage provider, only for the company to later reverse their decision.
According to all 752 mortgage customers surveyed, despite 50% relying on a broker to find their loan, 28% are dissatisfied with the experience they have had with their current mortgage provider.
Kynan Benjamin, Head of Underwriting at KSEYE, said: “Given how busy and competitive the UK property market has been over the past 12 months, the mortgage industry has come under scrutiny. And understandably so, our research highlights just how difficult it can be for individuals to jump through the necessary hoops to secure a mortgage.
“Clearly, the inflexible application process that many lenders rely on is precluding some people from getting onto or moving up the property ladder. The self-employed, those working in the gig economy, and people with irregular sources of income are suffering the most.
“So, it is of little surprise that the specialist finance sector has seen an increase in applications in 2021. Those keen to purchase a property, particularly during the stamp duty holiday, have had to consider their options – for some, as the data shows, mortgages are not always viable, and so greater flexibility or a more bespoke option is required.”
