Confidence has returned to the mortgage market, heralded by media and industry alike.
However new research from Precise Mortgages, the specialist lender, highlights that consumer sentiment is still playing catch up. The Mortgage Voice report surveyed 2,200 consumers – homeowners, renters and buy to let landlords – to better understand the market and consumer views on its direction of travel.
Repairing slowly
Almost half (46 per cent) of respondents think that the mortgage market is in poor health and repairing slowly with access and availability of mortgages for aspiring homeowners the apparent root cause for pessimistic sentiment; six in ten (62 per cent) respondents who aspire to own a home want to buy within the next five years, yet many worry about the barriers they face. Key amongst these findings is the ability to save a large enough deposit (62 per cent).
There are several other particular areas of consumer concern asking for industry response. While three in ten (29 per cent) consumers believe that access to mortgages has broadly improved they don’t believe that this is enough. More than half (53 per cent) of respondents feel that the market continues to favour those with large deposits and two in five (39 per cent) say mortgages are too difficult to obtain for first time buyers.
Need to adapt
There is also a strong sense that the current mortgage market needs to adapt to keep pace with consumer need. A fifth (20 per cent) of respondents feel that mortgages are too difficult to access for the self-employed or freelancers while a further fifth (19 per cent) argued that the mortgage market doesn’t cater well enough to those with blemishes in their credit history.
When it comes to improving the mortgage market, research respondents identified improving rates and access as well as considering lending criteria and eligibility on an individual basis as paramount. While Government initiatives such as Help to Buy have brought a boost for some, almost a quarter (22 per cent) say they have very little knowledge of it, while one in ten (11 per cent) believe it is not enough and other innovations are needed to drive market growth.
Comment
Alan Cleary, managing director of Precise Mortgages, said: “The research presents an interesting conundrum – on the one hand confidence has returned and this is being rightly celebrated across the industry but there appears to be a delay in this buoyancy filtering down to the consumer. Ultimately, the market is there to serve them and yet many of them don’t feel served by lenders and are concerned that access to the market is denied to them. We have a significant role to play in combating the feeling that mortgages are difficult to obtain, that lenders continue to favour large deposits and are unforgiving of those with credit blemishes or alternative employment histories, perhaps freelance or self-employed.
“There are specialist lenders in the market designed to meet this challenge but there is still more to be done across the wider industry to innovate products and ensure they respond to contemporary consumer need. Ensuring that all viable homeowners have access to mortgage products should be the aim of lenders across the board, both to meet homeowning aspirations and continue to grow the recovering British economy.”
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