60% increase in mortgage application rejections

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by Kay Murchie

A survey from price comparison website, moneyexpert.com, has established that 738,000 mortgage applications have been rejected since March, this is a 60% increase on the previous half year.

Out of 738,000 applications, 382,000 were aged between 25 and 34. However, younger people were not the only ones to have an application rejected, many remortgagers and older first-time buyers were considered ineligible for a mortgage.

Chief executive of MoneyExpert.com, Sean Gardener, said the financial environment is far stricter than in the summer of 2006 and people need to be prepared for rejection following tighter lending restrictions.

Mr Gardener added that lenders quite reasonably do not want to take risks when there are pressures on how much people can afford, so it’s up to the applicant to convince their bank they can manage the repayments.

Five interest rate hikes since August 2006 has meant that £1,320 per annum has been added to a £150,000 mortgage.