Mortgage applicants to struggle like the days of old

Over recent years credit conditions in the UK have been pretty lax, and even those with poor credit usually managed to find a suitable mortgage from one of the many lenders offering loans and mortgages to those with damaged credit.

However, a recent report has suggested that the days of being able to get a mortgage pretty easily have long gone, and consumers may now have to go back to the days of old, which meant going cap in hand to the bank or lender in order to try and persuade them to offer them a mortgage.

Many banks and building societies are raising rates and changing criteria to make it more difficult for higher risk consumers to get a mortgage, which effectively means that those without perfect credit are going to be left out in the cold with most doors slammed shut in their faces.

A number of lenders, including the Nationwide and the Cheltenham and Gloucester, have recently announced that they are increasing the rates on their mortgages, and many others have made significant changes to their lending criteria over recent weeks.

With all sorts of mortgage deals disappearing from the shelves – for instance there are now only nine lenders that offer 100% mortgages compare to 22 lenders just six months ago – and an increasing number of lenders raising their loan to value ratios and demanding higher deposits for affordable mortgage deals, the situation is set to get worse.

One industry professional stated: “Conditions in the mainstream mortgage market are now rapidly deteriorating at a frightening speed, with lenders changing their pricing and/or criteria at the fastest pace in living memory, and probably ever.”