Only 19 percent of first-time buyers were able to get a mortgage on their first attempt last year, Aldermore research suggests.
This is compared to the 48 percent who use it first time round for the pandemic.
The survey of 1,000 potential homeowners found that 43 percent of first-time buyers were turned down more than once for a mortgage. This was more than the 17 percent who said this was the case in March last year.
The share of new potential buyers ever rejected remained stable, with 38 percent entering in March this year compared to 36 percent last year.
The investigation found that in many cases new buyers were rejected for more than one reason.
Two fifths were rejected due to poor credit history, compared to one fifth last year.
Because there were no high mortgage loans on the market until recently, about 39 percent of the applications were rejected because their investment was too low. This happened in March last year hindered 19 percent of the first time buyers.
Those who were self-employed, with irregular income or on contracts, were turned down for a mortgage in a third of the cases, while a payday loan blocked 29 percent of buyers from getting their first mortgage.
Lack of income was the main reason for rejection for a quarter of the respondents.
The survey also revealed an increase in the number of lenders. About 35 percent of starters were rejected because the mortgage lender made an administrative error, compared to 14 percent last year.
Solve credit problems
About 28 percent of prospective startups said credit history was a concern for them in getting a mortgage, while 39 percent said they were improving their score.
One-fifth said they feared their credit rating had deteriorated since the pandemic.
Having an overdraft was an obstacle for 34 percent of starters when applying for a mortgage and 31 percent of the respondents experienced a shortage of work.
Student loans hit 26 percent of startups and 23 percent were held back by credit card debt.
Jon Cooper, chief of mortgage distribution at Aldermore, encouraged First-time buyers don’t have to worry about being turned down for a mortgage, as options have increased over the past decade.
He said: “The growth of specialist lenders – who, with human acceptance, delve into the details of more complicated applications – have opened the door for those with complicated income streams or credit troubles in their past to find their way into home ownership.
“The process of buying a home can be confusing and complicated, especially since this generation first time copper is more diverse than ever before in financial circumstances.“
He added: “It can feel daunting at times, so we recommend seeking advice from a mortgage broker who can provide a full market picture and offer specific options for a new buyer’s individual circumstances. “
Shekina is a reporter at Mortgage Solutions. She has over two years of experience in the B2B publishing market, with previous industries including the animal, funeral, hospitality, retail and jewelry trade. Follow her on Twitter at @ShekinaMS