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The mortgage industry is “not fit for purpose”, claims Together

Panoramic views of London, little noise pollution, three generous sized bedrooms and the prospect of a near 9% gross rental yield - these are just some of the primary reasons why buy-to-let investor Adam Jones recently made an offer on a flat in Camden, north-west London. But when he applied for a mortgage, he discovered a lack of appetite from lenders, and was unable to secure the funds required to move forward with the deal.

Older blocks and ex-local authority are notoriously hard to maintain, which partly explains why it is harder to secure finance. But even some new build luxury high rise schemes encounter issues when prospective purchasers attempt to get finance to buy property, due to the fact that very few lenders will consider lending against any flat in a building that has multiple storeys.

Part of the problem is that the mortgage industry is “not fit for purpose” because it is failing to keep up with modern borrowers’ needs, according to Together.


A new survey commissioned by the specialist lender suggests that more than half of mortgage applicants were rejected for lifestyle choices including being self-employed or buying a converted home.

The study of the market found a huge percentage of mortgage applicants - 54% who’d fallen out of the application process - had been denied a home loan for reasons that could be considered ‘normal’ by most people.

These included factors once believed to be ‘non-standard’ such as their employment type; they could be self-employed, a contract worker or take a dividend, or the type of property they were looking to buy, including conversions or high-rise flats.

Pete Ball, personal finance CEO at Together, believes that many mainstream lenders need to keep pace with the demands of these types of borrowers, and stop relying on a computer-automated approach, and outdated and rigid criteria - when deciding mortgage applications.

He said: “The world has changed. People’s pay, working patterns and pensions have altered beyond all recognition from 30 or 40 years ago. Even where they live, who they chose to live with, or the type of property they want to buy is vastly different from a generation earlier.

“What was previously thought to be ‘normal’ simply doesn’t exist anymore.”

Together’s wide-ranging study, which was conducted by market researchers YouGov, surveyed about 2,000 people about mortgage applications and the reasons why some of them had fallen out of the mortgage application process.

Some 10% were denied because the property they wanted to buy was considered ‘non-standard’, which could mean anything from a converted barn to a high-rise flat.

Ball added: “We recognise that was once considered unusual or specialist is now becoming more normal, and the mainstream needs to be able to adapt to the changing world.”

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