Specialist lender Together has warned potential buyers that affordability is just one small part of the ownership puzzle.
According to Halifax, a typical home in the UK costs 6.7 times average annual earnings of a full-time worker, down from 7.3 times a year ago.
However, Together reveals that beyond the high-cost environment and stricter lending criteria, there are other significant challenges for would-be owners.
Findings from Together’s Residential Market Survey revealed that more than 53% of the population are currently viewed as ‘non-standard’ applicants by mainstream lenders.
Because of this, a further 19% have been rejected for a mortgage in the past five years.
Having non-standard income, including multiple and complex incomes or being self-employed, was cited as a key reason for being rejected for a mortgage for 22%, while having thin or impaired credit (21%) or being over-55 also worked against these applicants.
Alan Davison, personal finance distribution director at Together, said: “Fundamentally, it’s not just the earning to house price ratio that matters but also the criteria which affects the borrower’s ability to buy.
“The residential mortgage market is just not built to handle specialist cases, and mainstream lenders can – and often do – reject applications outright if the borrower’s needs don’t meet a set of strictly-defined criteria.
“However, many of these applications are merely viable non-standard cases which could be approved if the mainstream mortgage process were adapted.
“There is a critical need for specialist lenders to support the problems faced by borrowers who are categorised as ‘non-standard’ in realising their ambitions to own their own homes this year and in the future.”
