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Lenders are discriminating against pregnant women

Lenders are discriminating against pregnant women

Nearly one in 10 young women who have applied for a mortgage in the last 10 years say they were discriminated against by lenders on the basis that they were pregnant or intending to start a family.

Research conducted on behalf of uSwitch by Censuswide in September among 2,002 women aged 25 to 45-years-old who have applied for a mortgage in the last five to 10 years.

The poll found that a quarter intentionally hid their family plans from lenders.

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Following the Mortgage Market Review in April 2014 and the introduction of stricter mortgage eligibility criteria, lenders may refuse to grant a mortgage if they believe an applicant is unable to meet the repayments due to an expected drop in income.

Of those confessing to hiding their plans from their lender, three quarters did so for fear of their application being rejected or missing out on the best rate.

The pressure of concealing this information is having an emotional impact though, with the survey showing 71 per cent of women who concealed their family plans from lenders experienced high levels of anxiety during the application process.

In order to cope with any drop in income, almost half of women saved up before going on maternity leave, in order to cover monthly mortgage repayments and other essential household bills, with 79 per cent stating that savings should be taken into account when applying for a mortgage.

Over a quarter women think the current affordability criteria is out of step with modern family finances, according to uSwitch.

Tashema Jackson, commercial manager for banking for the switching website, warned withholding information can have severe implications in terms of invalidating any mortgage offers.

“While it is vital that lenders help people only borrow within their means and ensure they can afford future payments, it is not fair for lenders to make blanket assumptions.

“We believe lenders should be making decisions based on a broader picture of an applicant’s financial situation, including the amount that they have in savings, rather than on assumptions about a woman’s personal circumstances or intentions.”

The study was commissioned following a number of enquiries the Financial Ombudsman Service received from women who felt their mortgage applications were rejected because they were due to go on maternity leave.

Ms Jackson added that anyone feeling discriminated against should lodge a complaint with the mortgage provider before escalating to the Fos.

A spokesperson from the Fos told FTAdviser that as lending rules have tightened, it has started to receive a handful of enquiries from people concerned their mortgage application was rejected due to other factors, like their relative youth or the fact that they were due to go on maternity leave.

“As with age-related restrictions, we don’t think it is fair to penalise people solely because lending procedures don’t allow for being ‘too old’ or pregnant. Provided, of course, that you could still demonstrate you’re ability to pay even if your circumstances changed.”