Good news: easier to get mortgages now than any time since 2014

Mortgage brokers say they are encountering fewer difficulties sourcing products now than at any time for three years. 

Research from the Intermediary Mortgage Lenders Association suggests almost a third of brokers reported that they encountered no problem sourcing a mortgage for any type of client in the second half of 2016 – up from 26 per cent in the first half of the year, and double the rate recorded a year earlier in the first half of 2015. 

IMLA says this is a clear reflection of improving lending conditions.

Brokers also reported a rise in successfully sourcing mortgages for different groups of borrowers.

So for example the number of brokers who said they were unable to source a mortgage for first-time buyers fell from 29 per cent in the first half of 2016 to 16 per cent in the second half of the year, while the proportion who were unable to source a mortgage for standard status borrowers also fell from 26 per cent to 15 per cent over the same period.

Conditions were also reported to be softening for borrowers who sit outside of the mainstream mortgage market. 

The rate of brokers who were unable to secure a mortgage for borrowers who are self-employed or have irregular incomes fell from 50 per cent in the first half of 2016 to 25 per cent in the second half, while the rate for those unable to source mortgages for interest-only borrowers fell from 52 per cent to 31 per cent.

There was also a substantial fall in the rate of brokers who were unable to source a mortgage for borrowers looking for mortgages lasting into retirement, which fell from 43 per cent in the first half of the year to 29 per cent.

IMLA says the news is particularly good because the increase in brokers successfully sourcing mortgages for a greater proportion of clients is set against a backdrop of falling average mortgage rates.

“It is hugely encouraging to see a greater number of brokers are reporting that they are successfully arranging mortgages for a wide variety of clients. Over the past few years, regulations like the Mortgage Market Review have raised the bar in terms of borrowers’ requirements, which some predicted would leave many borrowers locked out of the market” says Peter Williams, IMLA’s executive director.

“House prices have been growing faster than incomes over the past few years, which has challenged affordability. This issue has been particularly acute among first-time buyers, which means the fact that just 16 per cent of brokers reported they were unable to source a mortgage for someone in this group over the six months is very positive news” he adds.