36% of UK adults planning to buy a property in the next year are likely to consider alternative finance options, according to a research by Market Financial Solutions
Difficulty accessing mortgages are preventing prospective homebuyers in the UK from taking advantage of the stamp duty holiday, according to new research by Market Financial Solutions (MFS).
The bridging lender commissioned an independent survey of 1,262 UK homeowners and buyers. Of those, more than 200 have bought a house in 2020, while over 300 are currently on the hunt for a property.
It found that 52% of current homeowners want to take advantage of the stamp duty holiday, but 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, he said.
Raja said, 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.
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