Banks Too Reluctant To Lend, Say First Time Buyers

The research by the National Centre for Social Research found that two-thirds of people aged 20 to 45 who do not already own their own home have given up on the idea and believe that renting will become the norm within the next generation.

Among the other findings, 84% say first-time buyers believe banks do not want to lend to them, 92% say it is hard to get a mortgage and 60% say it is very hard or virtually impossible - but 77% still want to own their own home. The biggest perceived barrier to home ownership (cited by 67%) is the size of the deposit required to get a mortgage.

Just to really rub it in, a report out today from Rightmove forecasts that rents will rise 10% this year.

The survey was commissioned by the Halifax, Britain biggest mortgage lender, and it has pledged to come to the rescue with the launch in July of a new First Time Buyer Pledge - a set of promises to make the mortgage application process easier, to explain its lending criteria and to explain why it has turned an application down.

Mortgage Market Review (MMR), a package of proposals on everything from self-certified mortgages to protection for vulnerable borrowers have provoked furious lobbying from the banks and the row was opened up again last week when a Shelter opinion poll finding that three-quarters of first-time buyers back tougher regulation prompted the Council of Mortgage Lenders to argue that there are as many risks from too much regulation as too little.

An alternative view comes in another report out today from the think-tank IPPR which argues that reckless lending by the banks was one of the main reasons for the last boom. Source PW.

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