A new study in the mortgage sector reveals 34% of UK adults looking to purchase a home in the next year could see their application rejected because of “adverse credit histories”.
Considering the financial challenges people endured in the past two years is a growing concern for all those with interest in the mortgage or property market.
Analysis of the market suggests people looking to purchase a home in 2022 have unsecured debts of an average of £2,732. This figure is 34% higher than the average level of UK debt, which stands at £2,035.
People have a lot of higher bills to consider
There are many financial challenges for UK residents to consider right now, including:
- A rising cost of living
- Increase in energy bills
- An increase in interest rates leading to higher mortgage payments
- An increase in your weekly grocery shopping
With outlays increasing, there is a fear a growing number of people will have to rely on unsecured debt to manage their bills each month.
What does an industry specialist say?
Peter Beaumont is a known-name in the mortgage sector, and he says these figures illustrate how challenging it is for people to manage credit issues when looking to buy a property.
Peter said; “The reality is a number of those who are expecting to buy a home this year are likely to see their mortgage rejected out of hand. With more ‘buy now pay later’ products on the market and the rising costs of everyday items, there is a real risk that people will unknowingly walk into a bad credit score.”
There is a growing realisation that many people are unaware that even a limited amount of debt can hamper their chances of arranging a mortgage. It is vital people consider their options, and know the full impact, of accessing additional debt.
Peter Beaumont also said; “This is not only a concern for those first-time buyers trying to get onto the property ladder, but also for homeowners looking to remortgage in the next few years. The risk for this group is that lenders no longer deem them a viable option, and they tick up onto the SVR rate. With the Bank of England expected to continue to raise the base rate over the next year, this could mean they end up paying substantially more in their repayments than expected. In real life, things go wrong – and it seems unfair to punish someone for a short-term credit blip here or there. Luckily, for those people who would otherwise be left with no option, there are specialist lenders out there who have more flexible criteria and believe in real-life lending.”
How to explore your mortgage options with The Money Hub
If you are looking into taking out a mortgage in 2022, but if you don’t devote the time or energy to finding the best deal, you might miss on great value. Thankfully, help is at hand.
Call The Moneyhub Limited on 0203 725 5830 and speak to one of our highly specialised and dedicated Mortgage Advisors or you can complete an enquiry form which will allow you to schedule a call time.
DISCLAIMER: These articles are for information only and should not be construed as advice. You should always seek advice prior to taking any action.