According to the latest research from specialist lender Together, the surging cost of living and inflationary pressures are causing a significant impact on households’ ability to secure a mortgage.
The study shows that over half (53%) of UK adults with a credit ‘blip’ have struggled to get a mortgage, a figure which escalates to a whopping 86% among those aged 18-34.
Among those who have had a mortgage application turned down, 20% were unable to secure their mortgage in time, leading to the loss of their dream home, and 16% were forced to abandon the idea of buying a property altogether.
In dire situations, 23% had to rely on family and friends to act as guarantors, leading to potential future repayment anxiety, and 17% had to exhaust all their savings to afford a cash deposit.
Moreover, the research highlighted the emotional toll of these rejections. Among those who had been turned down, 32% reported feeling worried about their future, 26% felt depressed, and 23% felt like a failure.
As high street lenders continue to tighten their risk appetite and criteria, specialist support, which offers case-by-case evaluations of people’s finances, appears to be a solution for those with a missed bill or loan payment on their record due to the rising cost of living.
James Briggs, head of personal finance intermediary sales at Together, said: “Our research clearly shows that mortgage applicants, particularly those in the younger demographic, are continually facing challenges securing mortgages due to having County Court Judgements (CCJs) or blips on their record.
“As the cost-of-living crisis puts more pressure on people’s finances, the number of applicants in this category is only set to increase, exposing them to potential rejection if they seek a high-street mortgage.
“Brokers may be approached by home-movers or first-time buyers looking for advice about finance needed to purchase a property despite having a blip on their record.
“They should feel encouraged that there are specialist lenders like Together, who are best positioned to support these cases, rather than the automated approach of high street banks.”
