Almost a third of property buyers denied a mortgage despite SDLT holiday

Demand for property has soared as purchasers, including buy to-let investors, make the most of Rishi Sunak's stamp duty holiday, but many prospective buyers are being denied mortgages, new research shows. 

A survey of almost 1,300 UK homeowners and buyers has revealed some of the challenges people are facing within the property market at present. Of those people polled, more than 200 have bought a house in 2020, while over 300 are currently on the hunt for a property. 

The study, undertaken by Market Financial Solutions (MFS), found that 52% of current homeowners want to take advantage of the SDLT holiday, but are concerned about their ability to get a mortgage. 

Some 32% of prospective homebuyers have been denied a mortgage. A further 43% said they have been gazumped on a property since the holiday was announced.

Almost half - 46% - of those who have bought a property in 2020 said they encountered significant delays or complications when applying for a mortgage from a bank. Almost two-fifths (38%) of current house-hunters said the same thing.

MFS research also showed that 36% of UK adults planning to buy a property in the next year are likely to consider alternative finance options like bridging loans. 

Paresh Raja, CEO of MFS, said: “The stamp duty holiday has already had a positive effect on the UK property market, sparking much more activity among buyers and sellers. However, today’s research shows that many prospective homebuyers are unable to take advantage of this initiative.

“Frustratingly, this is often due to the challenges of securing a mortgage, which are beyond buyers’ control. Many banks are treading carefully and, as a result, applications are taking longer to process and there is a higher chance of an application being rejected. This is putting property chains at risk of collapsing. 

“At this point in time, it is important that lenders keep lending – they must ensure buyers have access to the finance needed to complete on a purchase. Failing this, the Stamp Duty holiday will only have a limited effect.” 

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