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Two in three prospective first time buyers have been rejected for a mortgage

Aldermore bank’s First Time Buyer Index, a survey of 2,015 prospective first time buyers, reveals many are struggling to secure a mortgage as conditions created by Covid-19 continue to bite. 

Prospective first time buyers are currently experiencing significant levels of mortgage rejection. Only a third (35%) that are looking to buy their first home were able to get a mortgage on the first attempt, considerably down from almost half (48%) that were able to do so in the First Time Buyer Index findings from March 2020, just before the pandemic hit. 

Nearly half (45%) of prospective first time buyers say they were rejected for a mortgage once, and a further 20% say they were rejected for a mortgage more than once. The main reason for a rejected mortgage application was that the prospective first time buyer has poor credit history (21%), followed by an administrative error (21%) and not having a large enough deposit (20%). 

Half of prospective first time buyers (49%) experienced disruption to their employment since the pandemic began increasing fears of credit issues and difficulty securing a mortgage.

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