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8 in 10 young adults believe banks don’t want to lend to FTBs

Nearly eight in 10 people aged 20 to 45 believe that banks do not want to lend to first-time buyers, according to a report by Halifax.

The bank’s fifth annual report – which surveyed 40,000 people between 20 and 45 and 4,000 people with children between these ages – found that 79 per cent think banks do not want to lend to first-time buyers and that 21 per cent believe it is “virtually impossible” for these buyers to get a mortgage. This is despite the increase in first-time buyers last year to levels not seen since 2007.

Forty-three per cent of respondents are currently saving for a deposit, says the report, but 57 per cent are not.

The three most cited barriers to homeownership among those who do not own a property are the size of the deposit (57 per cent), high property prices (56 per cent) and low income (53 per cent).

London has the lowest proportion of homeowners aged between 20 and 45, at 39 per cent, and also the highest number of people in this age group who fear they will never own a home (82 per cent).

Those who do not own a home are prepared to save for a deposit for an average of 5.3 years and can afford to save an average of £33.35 each week.

Halifax mortgages director Craig McKinlay says: “While there has been an increase in first-time buyers in the past 12 months, at the same time there is also a growing group of young people who believe they won’t be able to get a mortgage. This difference between the reality and their perception needs to be addressed urgently if we are to prevent people from giving up on getting on the housing ladder. 

“We can educate people about the mortgages available to them but there is still the underlying issue of needing to build more affordable homes. There needs to be a long-term commitment to building more homes in the right locations.”

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  • Michael.White.BoutiqueCapital - Bridging Loans 15th April 2015 at 2:12 pm

    I completely agree Carl…… the typical nervous FTB or indeed 2nd or 3rd time buyer/remortgage seeker
    will have much calmer nerves when in the hands of an experienced practitioner to guide them through the increasing complexity of mortgage finance..

  • Carl McGovern 15th April 2015 at 12:38 pm

    Just like Old Mortgage bloke, I have had very little trouble placing First time buyer business. I also have a lot of experience in the Mortgage market, close on 30 years. Perhaps it’s the experience that helps us buck the trend, complete a thorough job for our clients and arrive at a more positive outcome, than this article suggests.

  • Michael.White.BoutiqueCapital - Bridging Loans 15th April 2015 at 12:13 pm

    This exchange of words started with you deciding in quite rude fashion that I was talking nonsense and being negative. Your rationale for making such a statement was a complete misunderstanding of my experience in the industry. ( I suggest you check out my credentials on LinkedIn.)

    This was followed by your incredibly naive statement that it is the role of intermediaries to re-educate the populaces as to their perception of bank lending in the mortgage market.

    No doubt your next pearl of wisdom will be it’s also the job of the intermediary to make people trust banks? The vilification of the banking system is somewhat overdone but the perception of distrust now exists, and to some extent quite rightly….. This understandably leads to the perception of banks not wishing to lend.

    I am of course fully aware that thousands of young people are being granted mortgages on a daily basis, however, I would strongly suggest that anyone who truly believes the present market to be functioning in a perfect state of harmony for such FTBs is at best very naive indeed.

    The same conclusion applies to people who believe it is inappropriate to criticise the mechanics and perception of the market, in particular the banks because it is deemed negative…..

    Notwithstanding, I remain in the finance industry, as I have done for almost 40 years, and will continue to make my opinions known from time to time, some may be negative and some may be positive where merited.

  • Old Mortgage Bloke 15th April 2015 at 6:52 am

    I read the article well enough to understand that the respondents to the survey have answered on the basis that they ‘believe’ that to be the case. What someone ‘believes’ – and what is reality – can be very different.

    I have considerable experience in the market thank you. Approximately 37 years in total – from various different view points – none of which have been closeted in some back office position (how condescending)!

    And as an example of reality – my son (aged 26) and his girlfriend (aged 24) have just had a mortgage agreed as first time buyers. They are not big earning high flyers – they both just have good steady jobs and have saved a decent deposit over the last few years or so.

    Your last paragraph makes me wonder why you’re still in the industry if that’s truly how you feel about it!

  • Michael.White.BoutiqueCapital - Bridging Loans 14th April 2015 at 11:23 am

    I suggest you read the article more closely…… “40,000 people between 20 and 45 and 4,000 people with children between these ages – found that 79 per cent think banks do not want to lend to first-time buyers and that 21 per cent believe it is “virtually impossible”

    Unfortunately, the only nonsense being uttered is from you….. If you had any real experience of the market, rather than I suspect being closeted in some back-office position, where attention to detail has long since passed….it would be apparent why the perception of the public is indeed so negative.

    The jobs-worth, clearly limited intelligence questioning that takes typically place from glorified processing clerks who are labelled ‘underwriters’ has invariably no logical bearing on credit risk analysis. Add to this the inconsistency of judgement from ‘underwriters’ who probably sit facing each other, can only lead brokers and the public to throw their hands in the air and give up….Which, surprise, surprise leads to surveys and resulting articles like the one above being written.

  • Old Mortgage Bloke 13th April 2015 at 6:15 pm

    Nonsense! And what a negative comment Michael!

    Lenders DO want to lend – so it’s the job of brokers and the industry in general to get this message across.

  • Michael.White.BoutiqueCapital - Bridging Loans 7th April 2015 at 11:58 am

    Only 8 in 10 ?