FTBs struggle as mortgage applications slump

15-Oct-2007

Britons are finding it increasingly difficult to secure a mortgage as the rising interest rate and worries over sub-prime mortgages have squeezed the market.

That is the finding of new research by MoneyExpert.com, which indicates that more than 738,000 applicants for mortgages have been turned down in the last six months.

With stricter lending criteria coming into place, a trend exacerbated recently after the troubles of lender Northern Rock, the number of mortgage applications turned down has risen by 60 per cent since March of this year.

In the six months leading up to March 463,000 people had an application for a mortgage turned down, with successive rate rises – moving the base rate from 4.5 per cent to its current level of 5.75 per cent – finally starting to take hold.

Five hikes in the interest rate since August 2006 have added a substantial tariff to mortgage payments, with the property market showing signs of slowing down.

Sean Gardner, MoneyExpert chief executive, said: "Life is tough at the moment if you’re applying for a mortgage.

"The financial environment is far more stringent than in the summer of last year and people need to be prepared for rejection."

Mr Gardner added it was "no surprise" that figures from the Council of Mortgage Lenders (CML) suggested the number of first-time buyers is dwindling as people struggle to get their first property.

Significantly the research indicated that the age bracket 25 to 34 was the demographic most affected by the rejections.

In this age bracket four per cent of people had an application for a mortgage turned down.

New buyers drop by 20%
http://www.firstrungnow.com/first-time-buyer-news/new-buyers-drop-by-3572.aspx

Second home surge pushing out FTBs
http://www.firstrungnow.com/first-time-buyer-news/second-home-surge-pushing-3570.aspx

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