London, UK, 28 May 2015: Almost half (45%) of those who planned to buy a property since the introduction of the Government’s new affordability rules last year have failed to do so.
The findings indicate that continued confusion means many people have been disappointed since the introduction of the new rules through the Mortgage Market Review (MMR). A quarter claim that the MMR has impacted their ability to buy a property, while a further third (37%) report that the changes have made them feel less in control of securing a mortgage. These findings are revealed in Experian’s latest insight report, The Mortgage Muddle – One Year After The MMR.
The research went on to reveal that among those who were unable to buy since the introduction of the MMR, many still appear to be overlooking the basics in financially preparing to apply for a mortgage. Almost half (46%) have never checked their credit report, meaning they have no indication of how a lender might view their ability to repay money.
James Jones, head of consumer affairs at Experian, commented: “Preparation is the key to successfully navigating the mortgage market post-MMR. Understanding the affordability rules and how a lender makes their decision is the key to success. But it can take time to build a positive credit history and a solid track record of positive money management, so it’s important you start preparing as soon as you make the decision to buy.”
In a separate study conducted by Experian in April 2014, just 44% of those surveyed were aware that the MMR would mean that lenders would be more careful about ensuring mortgage applicants could afford their repayments. And one year on, it appears that this “Mortgage Muddle” is continuing to affect many. Of 1,500 respondents who either bought or planned to buy a property in the last year:
In addition, of those who were unable to buy in the last year:
Worryingly, 11% of those who were unsuccessful did not know why or haven’t asked their lender, leaving them at a significant disadvantage when it comes to improving their chances of being accepted in the future.
“We understand that navigating the mortgage market can be tricky for buyers, so we’ve launched a useful step-by-step Mortgage Application Guide available at www.experian.co.uk/improve to give people the best chance of being approved for the mortgage they can afford at the best rate, which could save a significant amount of money in the long run,” James Jones continued.
Guy Shone, at ExplaintheMarket, commented: ”We’re now one year on from the MMR and it seems many people remain stuck in a bit of a muddle. More needs to be done in 2016 to encourage personal financial planning and properly support aspiring home buyers, so that all buyers fully understand the rules of the game – and stand the best chance of securing a property they can afford."
Here are some simple tips from Experian CreditExpert to help people prepare for a mortgage application:
Notes to editors:
Research was carried out online by Explain the Market in May 2015 among a sample of 1,500 UK adults.
For more information please contact:
Anna Selby: 020 3772 2516
Richard Martin: 020 3772 2697
Katie Swain: 020 3772 2534
Experian Consumer Services
Jill O’Connor, PR Manager 020304 24870 / firstname.lastname@example.org
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