Claims that lenders are restricting mortgage access


There have been claims made by brokers that lenders are rejecting mortgage applications for trivial reasons on the run up to the end of the year because they have already met their yearly targets.
By rejecting mortgages now, the demand for them will be higher for next year, making it easier to hit next year’s targets.
Outperforming now means a tougher time hitting targets next year, and this is what brokers have said is stopping some applications being approved.
Several brokers, including The Mortgage Centre (TMC), have cited cases where they feel borrowers have been denied mortgages for arbitrary reasons.
One case cited by Martyn Leader, from TMC, claims that an application with Birmingham Midshires (BM) had been denied because the hopeful borrower had a hire-purchase deal on a car which still had a year left to run, in addition to a sizeable savings from a recent property sale.
According to Leader, these reasons are not good enough. “It did seem like a trivial way to decline the application,” he said. “I suspect what BM is doing is controlling output through its credit scoring and that they will work up the reasons for declining things.”
However, this is not to say that application acceptances are tightening up across the board. Leader added the, “Halifax seems to be accepting things they would not have accepted a few months ago, for the first six months of the year Halifax was tightening its credit scoring.”
Tom Fielding, an IFA for Fielding Financial Services said that lenders can easily claim that these cases are just them being sensible, and that they “should not be seen to be lending more than people can afford to repay.”
However, this is merely speculation, and the opinion of some brokers in the market. We can hope that these lenders are, in fact, being sensible, and not altering access to the housing market in order to suit their own needs. Banks have lost a lot of trust over the last decade, and hopefully are now acting with the utmost responsibility.

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