New research by Market Financial Solutions (MFS), has revealed that 31% of people were denied a mortgage since the government’s stamp duty holiday.
The lender commissioned an independent survey of 1,262 UK homeowners and buyers. Of those, more than 200 bought a house in 2020, whilst more than 300 people are currently on the hunt for a property.
The survey found that 52% of current homeowners want to take advantage of the stamp duty holiday, but they are concerned about their ability to get a mortgage.
Following the introduction of the holiday on 8th July 2020, 32% of prospective homebuyers said they have been denied a mortgage and further 43% have been gazumped.
Almost half (46%) of those who have bought a property in 2020 said they encountered significant delays or complications when applying for a mortgage from a bank.
MFS research also showed that 36% of UK adults planning to buy a property in the next year are likely to consider alternative finance options like bridging loans.
Paresh Raja, CEO of MFS said, “The stamp duty holiday has already had a positive effect on the UK property market, sparking much more activity among buyers and sellers. However, today’s research shows that many prospective homebuyers are unable to take advantage of this initiative.
“Frustratingly, this is often due to the challenges of securing a mortgage, which are beyond buyers’ control. Many banks are treading carefully and, as a result, applications are taking longer to process and there is a higher chance of an application being rejected. This is putting property chains at risk of collapsing.
“At this point in time, it is important that lenders keep lending – they must ensure buyers have access to the finance needed to complete on a purchase. Failing this, the Stamp Duty holiday will only have a limited effect.”