Providers need to increase the opportunities for people to borrow money, according to Saffron Building Society.
The Building Society Association reported that people are beginning to believe the availability of mortgage finance is increasing.
However, the organisation also reported that many are still put off buying a property for fear of getting turned down by lenders, while 21 per cent of people are worried their income isn’t high enough to borrow.
Saffron chief executive Jon Hall said: “This is a common misconception, therefore at Saffron, we want to ease this worry for first time buyers and look at affordability using rental history, not just income multiples, steering clear of the ‘computer says no’ approach adopted by too many lenders.
“Our manual underwriting allows us to look at each case individually to assess the affordability of the mortgage for the applicant, meaning it’s more suitable for those worried about income levels.
“For first time buyers, getting on the property ladder has never been more challenging particularly due to the difficulties in saving for a deposit, and 29 per cent of first time buyers worry about the size of their deposit (according to the BSA’s report). Again, we want to make it as easy as possible for customers to have the opportunity to get onto the property ladder and therefore offer first time buyers a 95 per cent loan to value (LTV mortgage), meaning they need just 5 per cent deposit.
“It is the responsibility of providers to offer their potential customers as many opportunities as possible to suit their needs. As an industry we should look for inventive alternatives to the ways in which we asses people’s finances, as this can only help the wider mortgage market as a whole.”
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