BML: Half of buyers with agreements in principle denied mortgage due to COVID-19
Half (50%) of prospective buyers have been denied a mortgage despite having an agreement in principle due to COVID-19, according to a survey of 1,305 current homebuyers and owners by Butterfield Mortgages Limited (BML).
The research also found that 31% of prospective buyers have lost their deposit due to delays in getting a mortgage, 52% have been stuck in a property chain due to challenges completing a transaction during lockdown.
Almost two-fifths (39%) have pulled out of purchasing a property despite putting in an offer, while 13% of homeowners have decided against selling their property despite having received offers.
16% of homeowners have taken advantage of the UK government’s mortgage payment holiday scheme, but a further 14% who wanted to have had difficulty applying for it through their mortgage provider.
Alpa Bhakta, CEO of BML, said: “The coronavirus pandemic took the property market by surprise.
“The fact many mortgage lenders withdrew products or stopped accepting applications during the lockdown has clearly had a damaging effect on property transactions.
“Indeed, today’s research shows that some buyers have lost their deposit, while others have missed out on properties having been denied mortgages despite receiving an agreement in principle.
“Positively, there are mortgage lenders who are continuing to issue loans and support homebuyers.
“What’s more, as lockdown measures are eased we are seeing activity return to the UK property market—as a result, demand that has been pent up over recent months might be released, resulting in a flurry of transactions in the second half of 2020.”