Affordability rules baffle half of FTBs

Affordability rules baffle half of FTBs

A new report from Equifax has revealed that an alarming 48% of those about to take their first step onto the property ladder are not aware of how the mortgage affordability rules might impact their mortgage application.

According to the data, of those who are currently in the process of applying for a mortgage, 18% have missed payments on credit agreements, 13% believe they have too many credit agreements, with the same percentage believing they have too few credit agreements.

The research also revealed that raising a deposit remains a major challenge for first time buyers. 37% of the first time buyers surveyed had managed to save between 5% and 10%, but 28% had saved less than a 5% deposit or none at all. Nearly a third (29%) are getting help with their deposit from family or friends.

Lisa Hardstaff, credit information expert at Equifax, commented: “The reality is that mortgage lenders will take a good look at a person’s financial situation when assessing an application. This includes looking at information on their credit report. And if they have missed or made a late payment on a credit or service agreement, this could be a cause for concern for prospective lenders. Also having too many credit agreements could indicate a person is financially overstretching themselves, too few, and a lender may find it difficult to assess how the person will perform with repaying their mortgage.


Lenders also have a duty to assess the long-term affordability of an applicant – will they be able to meet their repayments now and in the future. Yet nearly half of the first-time buyers, who responded to our survey, weren’t aware of how these rules might affect their application."

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Latest Comments

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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Landlady14
Landlady14 01 Mar 2017

You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

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Mark
Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

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Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

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Alan Read
Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

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James Powell
James Powell 27 Feb 2017

This is a very good news.

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DanHumphreys
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

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Matt
Matt 20 Feb 2017

Is this fake news?

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Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

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CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

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