The majority of first-time buyers are being held back from applying for a mortgage due to common misconceptions about affordability, deposits and eligibility, according to Stephanie Daley (pictured), Director of Partnerships at Alexander Hall.

Additional buyers

Educating them about their access to mortgages could unlock a substantial number of additional buyers. And, as some of the key drivers of the property market, that could have a knock on effect on the rest of the market, too.

Research carried out by the mortgage broker reveals that when those aspiring buyers were asked why they had yet to dip a toe into the mortgage market, the number one factor was a belief that their deposit simply is not sufficient (67%).

Other common barriers included fears of being declined, doubts over earning enough to borrow the amount required (55%), concerns about affording repayments, and embarrassment at potentially being rejected or sharing financial history.

Self-employment status (88%), existing property ownership (44%), or adverse credit (64%) also featured as major factors.

The survey also revealed that a significant proportion of aspiring buyers may not realise they are already in a position to secure a mortgage.

The relaxation of loan to income multiples and greater availability of low-deposit mortgage products, in particular, are helping to vastly improve the chances of getting a mortgage.”

In many cases, this is the result of a combination of recent market changes, including the relaxation of loan-to-income multiples – the sum you can borrow based on your income – and the increased availability of low deposit products, which means buyers’ perceived barriers may be outdated or overstated.

Daley says: “The relaxation of loan to income multiples and greater availability of low-deposit mortgage products, in particular, are helping to vastly improve the chances of getting a mortgage, even for first-time buyers or those who may have previously felt their financial position was a barrier.”