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Public perception of mortgages behind the times

Public perception of mortgages behind the times

Category: Mortgages

Updated: 18/05/2010
First Published: 18/05/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Britons' perceptions of the mortgage market and the availability of home loans is lagging behind reality, as the effects of the credit crunch have left a lasting impression.

Some 40% of the public think they would need a deposit of at least 20% to secure a mortgage, research conducted by unbiased.co.uk has found.

Such attitudes are likely to have been influenced by the collapse of the housing market and the tightening of credit that was subsequently implemented by the UK's high street institutions.

However, Moneyfacts.co.uk data shows that at the end of last month, the number of mortgages requiring just a 10% deposit had increased to 162, while there were 19 products that allowed a down payment of only 5%.

Would-be homebuyers who have managed to put together a 15% deposit had the choice of 358 home loans at the end of April.

"An increasing number of lenders are now offering 90% LTV deals, meaning especially first time buyers who were previously priced out of the market can now see if they can access an affordable deal," said Karen Barrett, chief executive of unbiased.co.uk.

In addition, the majority of Britons believe that salary multiples to obtain a mortgage have only improved slightly since early 2009, despite the average now though to be 3.3 times an individual's salary.

One fifth of respondents thought that they would only be able to obtain a mortgage worth between 0.5 and 2.5 times their salary, while a quarter thought lenders would give a maximum mortgage of three times salary.

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