Half mortgage applicants in 2020 turned down despite having an 'agreement in principle' in place, reveals survey

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16th July 2020 20:16 - Financial Services

Half mortgage applicants in 2020 turned down despite having an 'agreement in principle' in place: A survey has found that a significant number of homebuyers have been rejected for a mortgage since the outbreak of Covid-19, despite having an AIP in place.

The research by Butterfield Mortgages polled 1,300 UK adults who were in the process of buying a new property, or who are currently homeowners.

According to the research published in June (2020), the effects of changes in the market and lending criteria due to the outbreak of coronavirus have caused significant issues for homebuyers. Almost a third of respondents (31%) said that they had lost their deposit due to the delays caused by the pandemic. More than half (52%) reported being stuck in a property chain because of issues in completing home transactions due to lockdown.

The research also revealed the caution of buyers and sellers, with 39% of respondents who had put in an offer and had it accepted, later withdrawing it due to COVID-19 uncertainty. Similarly, 13% of sellers reported pulling out of selling their home after accepting an offer for the same reasons.

The survey also found that 16% of respondents have sucessfully applied for a payment holiday from their mortgage company, while 14% have faced difficulties trying to apply.

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