Research conducted on behalf of Kensington has found that brokers believe that the lack of individual underwriting is the biggest issue facing homebuyers and remortgage customers struggling to secure a new deal with lenders.
47% of mortgage brokers questioned highlighted underwriting as the major issue for borrowers, ahead of 46% who identified issues in proving affordability. Minor issues with credit history were only identified as a major issue by 38% of brokers.
The study shows brokers are concerned about the number of clients being rejected by lenders – 25% of those questioned expect the number to increase over the next year.
Over the 12 months brokers say around 47% of brokers say a fifth of their clients have encountered issues in securing a mortgage deal and 20% of brokers say 20% or more of their clients have been rejected by one or more lenders in the past year before securing a deal.
Steve Griffiths, head of sales and distribution at Kensington, said: “Mortgage customers are increasingly turning to brokers in order to secure deals as reflected in the growing market share for intermediaries against direct lenders.
“However brokers are clearly also experiencing issues in placing business and are having to work harder to ensure borrowers can access mortgage finance which is why we are investing to help intermediaries identify and support specialist customers.
“Underwriting is crucial to the mortgage process as Kensington’s experience over 20 years in the specialist market demonstrates. Lenders can help brokers by taking a more individual look at applications rather than simply relying on standard models of affordability and income.”
Around 36% of brokers highlight the biggest issue preventing clients securing a deal as being problems in proving income if they are self-employed with fewer lenders willing to consider applications from people working for themselves.
A similar number blamed standard lending models stating that 33% of their clients have fallen foul of computer models.
However just 22% of brokers say clients have encountered problems in raising deposits for mortgages despite concern about high LTVs and rising house prices.
