According to research by YouGov and digital mortgage broker Habito, Londoners are the most confused and stressed about mortgages in the UK.
65% of first time buyers claim the prospect of applying for a mortgage “terrifies” them, with four in five saying there are too many mortgage options available.
The broker claims that a lack of trust in professionals and the market is preventing millions from securing an affordable mortgage deal as 42% of first time buyers chose to seek advice from friends and family with only 4% opting to trust a mortgage broker.
Almost two million Brits say they are “overwhelmed” by the process of applying, and that they found it one of the most stressful experiences of their lives. It means millions of Brits end up with the wrong mortgage, which is estimated to cost consumers on average £,000 a year.
Overwhelmed by first time house prices in London averaging £427,000 and first time buyers needing an estimated 15% deposit to cover the additional costs of stamp duty, the research revealed a widespread lack of understanding among first-time buyers about how the mortgage application process works. 57% of first time buyers think applying for a mortgage is too hard, but are reluctant to seek professional help at the outset.
Daniel Hegarty, chief executive and founder of Habito, said: “Post-Brexit fearmongering has just made the landscape more confusing for homebuyers. Whilst we’re in for a bumpy few years as the market finds its feet again, interest rates are at historic lows, so now is a great to time to be looking at your mortgage options.
“The real problem is that people are afraid of their finances and finding the right mortgage product is like finding a needle in a haystack. But it’s time to stop burying our heads in the sand, as the experience doesn’t have to be terrifying if we’re willing to take control of our finances.”