The mortgage market has become too conservative following the financial crisis, research from the Intermediary Mortgage Lenders’ Association has claimed.
Imla’s research revealed that 84 per cent of brokers were unable to source a mortgage for at least one client during the past six months.
This was an increase on the 78 per cent who said the same thing in July last year.
Almost three-quarters of brokers believed the market had become more conservative, with two-thirds of lenders agreeing with them.
Peter Williams, executive director of Imla, said: “Regulation is vital to ensure that mortgage lending is safe and in proportion to consumer needs and the wider economy.
“But when families with dependants are among those who find themselves at a disadvantage, there are legitimate concerns that the pendulum has swung too far as a result of successive, incremental measures.”
According to Mr Williams, current trends would suggest that owner-occupation may fall below 62 per cent by the end of the next parliament, and there was a real need for government, regulators and industry to pause and assess the lie of the land.
Mr Williams added that the upcoming European Mortgage Credit Directive and the Basel Committee proposals will make it even harder to understand the individual impacts of interventions such as MMR.
Last week the Bank of England’s financial policy committee was given new powers by the Treasury to set limits on debt-to-income ratios and loan-to-value ratios.
According to Imla’s research, 53 per cent of brokers were unable to help a client with adverse credit or one who wanted an interest-only mortgage.
Meanwhile 50 per cent couldn’t help someone borrowing into retirement, and 46 per cent couldn’t find a mortgage for someone who was self-employed or had an irregular income.
| Mortgage market conditions are currently... | ||
| Brokers | Lenders | |
| Improving | 51% | 53% |
| Stable | 26% | 26% |
| Worsening | 23% | 21% |
Source: Imla
Adviser view
Mike Pendergast, of Cheshire-based Zen Financial Services, said: “They have definitely tightened up an awful lot on underwriting and the lenders are very picky when choosing who to give a mortgage to.
“Obviously there is a need to make sure the client can afford the mortgage but I think some lenders have gone too far in the opposite direction.”
