Concern over stricter rules governing mortgage applications

A new report by Experian suggests there is increasing insecurity among would-be home buyers regarding their ability to secure a mortgage. 

Last year, the government introduced new affordability rules under its so-called Mortgage Market Review (MMR), and one-quarter of those questioned said it has had a direct impact on their ability to purchase a home. 

Some 37 per cent of respondents said the changes had made them feel less in control about whether they would be able to bag a mortgage. 

The research suggested that some people had done little to prepare before applying for a loan. Nearly half of those questioned (46 per cent) admitted they had never checked their credit report. By doing so, would-be homeowners have a better idea about whether a lender will deem them capable of making repayments. 

Head of consumer affairs at Experian James Jones warned that preparation is vital in a post-MMR environment. 

"Understanding the affordability rules and how a lender makes their decision is the key to success," he said. 

Mr Jones warned that building a positive credit history can be time-consuming, hinting that those who want to get onto the property ladder need to prepare well in advance. 

Of the 1,500 respondents to the survey, nearly two-thirds (62 per cent) said they were unaware that lenders may require a bigger deposit before agreeing to a mortgage. 

Some 37 per cent did not realise that the MMR meant lenders look more closely at whether or not a customer can afford their repayments. 

The survey also revealed confusion over personal finances, with 13 per cent of respondents unaware of how much money they had remaining at the end of each month and 18 per cent ignorant about what repayments they could afford.