A Third of UK Mortgage Applicants Face Rejection

One in three mortgage customers in the UK were rejected by lenders during the process of applying for loans, new research has found.

A survey of more than 750 mortgage customers in the UK has uncovered the trials and tribulations they have faced when applying for their loans.

It found that 68% were successful at their first attempt, while 32% were rejected on at least one occasion.

Of those who were rejected by lenders, 44% said it was due to having an irregular income rather than a monthly pay-check.

Three in ten (30%) were self-employed when rejected for a mortgage.

More than a third (36%) of those who were turned down by a lender said that they were never told why their application had been unsuccessful.

Almost half (46%) had received an agreement in principle from a mortgage provider, only for the company to later reverse their decision.

According to all 752 mortgage customers surveyed, 50% relied on a broker to find their loan. However, 28% are dissatisfied with the experience they have had with their current mortgage provider.

The research from KSEYE also showed that 59% of mortgage customers feel that lenders need to be more flexible in assessing applications to take into account an individual’s full financial circumstances.

Kynan Benjamin, Head of Underwriting at KSEYE, said:

“Given how busy and competitive the UK property market has been over the past 12 months, the mortgage industry has come under scrutiny.

And understandably so, with our research highlighting just how difficult it can be for individuals to jump through the necessary hoops to secure a mortgage.

Clearly, the inflexible application process that many lenders rely on is precluding some people from getting onto or moving up the property ladder.

The self-employed, those working in the gig economy, and people with irregular sources of income are suffering the most.

So, it is of little surprise that the specialist finance sector has seen an increase in applications in 2021.

Those keen to purchase a property, particularly during the stamp duty holiday, have had to consider their options – for some, as the data shows, mortgages are not always viable, and so greater flexibility or a more bespoke option is required.”