More than a third of would-be homebuyers say the fear of being rejected is the biggest obstacle stopping them from applying for a mortgage, according to new research from LendInvest Mortgages.
The survey, carried out by Opinium among 1,000 adults planning to buy or remortgage within the next five years, found that 35% of aspiring buyers see rejection as their biggest barrier. Among renters the figure is higher still, with 45% admitting it is enough to put them off starting the process.
UNCERTAINTY HOLDS RENTERS BACK
The research highlights that uncertainty around the mortgage process remains widespread. Nearly one in three renters (29%) said they simply do not know how to apply for a mortgage, compared with 20% of would-be buyers.
Concerns about damaging a credit score were cited by 21% of respondents, while 14% said they were unaware of products suited to their circumstances.
The findings also show that 34% of those surveyed do not know which financial products and services would best support their home purchase.
LENDERS CALLED TO DO MORE
Rod McPherson, head of distribution at LendInvest, said the results pointed to a lack of confidence among buyers at the very start of the process.
“This data set confirms that fear of the unknown is often what puts people off from applying for a mortgage,” he said. “The percentage of renters who feel this is also rather staggering, and it tells me that mortgage lenders and brokers need to do a better job of making sure that the first steps of the process are accessible and understandable.
“A good mortgage advisor can help any client, and sometimes that includes getting them on the right path to homeownership when approval doesn’t seem likely. As a specialist lender, all of us at LendInvest are committed to working with brokers directly to support their clients because we know that home ownership doesn’t have a ‘one-size fits all’ approach.”
The results underline the scale of hesitancy among renters and buyers alike, suggesting that confidence-building measures and better communication of lending options could play a significant role in widening access to home ownership.
