Almost half (45%) of mortgage applicants have failed in their applications in the year since the government's affordability rules were implemented, according to Experian.
The government introduced a new set of rules known as the Mortgage Market Review (MMR) in April 2014. The rules require lenders to verify incomes, conduct affordability checks and evaluate the repayment plans of mortgage applicants.
Experian's survey reveals that a quarter of people believe the MMR has impacted their ability to secure a mortgage while 37% said the rules had made them feel less in control about getting a mortgage.
Of the 1,500 people surveyed:
- 62% didn't know that lenders could ask for larger deposits
- 37% didn't expect lenders to scrutinise the affordability of the mortgage
- 15% thought that lenders had relaxed their lending rules since the MMR.
Of those that weren't successful in their mortgage applications:
- 18% didn't know how much they could afford to repay each month
- 13% couldn't predict how much money they would have at the end of the month
- 14% didn't have a big enough deposit
- 12% couldn't secure the size of the mortgage they required.
James Jones, head of consumer affairs at Experian, said:
"Preparation is the key to successfully navigating the mortgage market post-MMR. Understanding the affordability rules and how a lender makes their decision is the key to success. But it can take time to build a positive credit history and a solid track record of positive money management, so it’s important you start preparing as soon as you make the decision to buy."