Consumer sentiment lags behind buoyant market
Almost half of respondents to its Mortgage Voice report thought that the mortgage market was in poor health with access and availability of mortgages the apparent root cause for the pessimistic sentiment.
Six in ten would-be homeowners wanted to buy in the next five years but worried about the barriers to entry – such as saving for a deposit.
While three in ten consumers believe that access to mortgages has broadly improved more than half of respondents felt that the market continues to favour those with large deposits with two in five saying mortgages were too difficult to obtain for first time buyers.
There was also a strong sense that the current mortgage market needed to adapt to keep pace with consumer need. One in five of respondents felt that mortgages were too difficult to access for the self-employed or freelancers while one in five also argued that the mortgage market didn’t cater well enough to those with blemishes in their credit history.
When it came to improving the mortgage market, respondents said improving rates and access as well as considering lending criteria and eligibility on an individual basis was paramount. While Government initiatives such as Help to Buy have brought a boost for some, one in five said they had little knowledge of it, while one in ten thought it was not enough and other innovations were needed.
Alan Cleary, managing director of Precise Mortgages, said: “The research presents an interesting conundrum – on the one hand confidence has returned and this is being rightly celebrated across the industry but there appears to be a delay in this buoyancy filtering down to the consumer.
“Ultimately, the market is there to serve them and yet many of them feel unserved by lenders and concerned that access to the market is denied to them. We have a significant role to play in combating the feeling that mortgages are difficult to obtain, that lenders continue to favour large deposits and are unforgiving of those with credit blemishes or alternative employment histories, perhaps freelance or self-employed.
“There are specialist lenders in the market designed to meet this challenge but there is still more to be done across the wider industry to innovate products and ensure they respond to contemporary consumer need.
“Ensuring that all viable homeowners have access to mortgage products should be the aim of lenders across the board, both to meet homeowning aspirations and continue to grow the recovering British economy.”
The Mortgage Voice report surveyed 2,200 consumers – homeowners, renters and buy to let landlordsl.