45% of people who planned to buy a property since the introduction of the Mortgage Market Review (MMR) last year have failed to do so, according to Experian.
Experian’s latest insight report, The Mortgage Muddle – One Year After The MMR, found that a quarter claim the MMR has impacted their ability to buy a property, while a further 37% report that the changes have made them feel less in control of securing a mortgage.
The research went on to reveal that among those who were unable to buy since the introduction of the MMR, many still appear to be overlooking the basics in financially preparing to apply for a mortgage. 46% have never checked their credit report, meaning they have no indication of how a lender might view their ability to repay money.
James Jones, head of consumer affairs at Experian, said: “Preparation is the key to successfully navigating the mortgage market post-MMR. Understanding the affordability rules and how a lender makes their decision is the key to success. But it can take time to build a positive credit history and a solid track record of positive money management, so it’s important you start preparing as soon as you make the decision to buy.”
Of 1,500 respondents who either bought or planned to buy a property in the last year:
- 62% were not aware that lenders may require bigger deposits (worryingly, 23% believe they could apply for mortgages with smaller deposits than before);
- 37% didn’t recognise that lenders would now be more careful on whether they could afford repayments;
- 15% mistakenly believe that lenders have now relaxed their lending criteria as a result of the MMR.
In addition, of those who were unable to buy in the last year:
- 13% do not know how much money they have left over at the end of the month;
- 18% don’t even know what monthly repayments they can afford;
- 14% did not have a big enough deposit for the property they wanted;
- 12% were unable to secure the size of mortgage they needed.
11% of those who were unsuccessful did not know why or haven’t asked their lender, leaving them at a significant disadvantage when it comes to improving their chances of being accepted in the future.