Butterfield Mortgages Limited has surveyed 1,305 current homebuyers and homeowners, to find out how they have been affected by COVID-19.
It found that 50% of prospective homebuyers have been denied a mortgage despite having an agreement in principle. 31% have lost their deposit due to delays in getting a mortgage and 52% of homebuyers have been stuck in a property chain due to challenges completing a transaction during lockdown.
BML commissioned an independent survey of more than 1,300 UK adults who are currently homeowners or are in the process of buying a property. The survey revealed that 50% of homebuyers have been denied a mortgage in 2020 despite being offered one in principle.
Almost a third (31%) of homebuyers have lost their deposit due to delays in getting a mortgage as a result of COVID-19. Around half (52%) of homebuyers surveyed said they have been stuck in a property chain due to challenges completing a transaction during lockdown.
BML’s research also showed that the coronavirus pandemic has made buyers and sellers hesitant when completing transactions. Two fifths (39%) of prospective buyers have pulled out of buying a property after having put in an offer due to COVID-19 uncertainty, while 13% of homeowners have decided against selling their property despite having received offers.
Elsewhere, the survey found that 16% of homeowners have taken advantage of the UK government’s mortgage payment holiday scheme. An additional 14% have wanted to use the scheme but have had difficulty applying for it through their mortgage provider.
Alpa Bhakta, CEO of BML, said: “The coronavirus pandemic took the property market by surprise. The fact that many mortgage lenders withdrew products or stopped accepting applications during the lockdown has clearly had a damaging effect on property transactions. Indeed, today’s research shows that some buyers have lost their deposit, while others have missed out on properties having been denied mortgages despite receiving an agreement in principle.
“Positively, there are mortgage lenders who are continuing to issue loans and support homebuyers. What’s more, as lockdown measures are eased we are seeing activity return to the UK property market—as a result, demand that has been pent up over recent months might be released, resulting in a flurry of transactions in the second half of 2020.”