One in four aspiring homebuyers have been denied a mortgage at some point, according to new research from LendInvest Mortgages (LSE: LINV), the UK fintech platform specialising in property finance.
The study of 1,000 adults planning to purchase or remortgage within the next five years found that 26% had been refused a mortgage, with income levels cited as the main reason for rejection in 22% of cases.
A further 18% were declined because of their credit history, while age and affordability accounted for 16%.
The findings highlight the continuing challenges faced by borrowers outside mainstream lending criteria.
Among those rejected, 40% had applied directly to a high street lender, another 40% used a mortgage intermediary, and 25% approached a non high-street lender directly.
The emotional impact of rejection was also clear, with most respondents reporting feelings of stress, embarrassment and frustration. However, 14% said the experience left them more determined and hopeful.
The research also found that 35% of potential buyers felt discouraged from even applying for a mortgage by high street lenders due to their income or employment type – a figure that rises to 40% among 18 to 34-year-olds.
Paula Mercer, sales director at LendInvest, said: “This data solidifies that for many, factors like income levels and credit histories are the biggest blockers to purchasing or remortgaging a home.
“The impact of getting denied a mortgage is significant, leaving many feeling stressed, embarrassed, frustrated and even ashamed.
“With 40% of rejected mortgage applications coming directly from traditional lenders, this research highlights the crucial role of mortgage brokers who champion specialist lenders, who often can offer solutions beyond the scope of high street banks.
“At LendInvest, we realise there is no ‘one-size-fits-all’ approach to mortgages, and we take pride in our lending criteria that can support those with complex income streams, the self-employed and those with the occasional blip on their credit history.”
