27 Apr

Property buyers change spending habits

Property buyers change spending habits

People hoping to get a new mortgage have changed their spending habits in order to meet tougher lending rules, according to a new survey.

Research by MoneySupermarket found 25 per cent of mortgage borrowers are planning to reduce spending and looking at alternative ways to improve their money profile.

A total of 20 per cent of those planning to apply for a mortgage within the next three years have also opted to use cash more frequently so their spending patterns are not evident in their current accounts - therefore, allowing them to look more attractive to lenders.

Kevin Mountford, head of banking at MoneySupermarket, explained: "Since the new mortgage lending rules came into play a year ago, those looking to remortgage, existing borrowers who are moving home and looking for a new deal and first time buyers will have been subject to their lender looking more closely, almost forensically,  at their monthly outgoings."

He added: "While the rules were introduced for the right reasons, in some cases borrowers who can easily afford a mortgage are being turned down for arbitrary reasons, despite them being able to easily afford mortgage repayments."

Therefore, Mr Mountford explained many consumers are attempting to paint a false picture in order to meet the tougher criteria being applied by mortgage providers.

Yet, this may not be the correct way as credit reports will still be able to reveal spending patterns. Instead, it may be more beneficial to spend time researching and shopping around for the most suitable mortgage.

The research also revealed that eight per cent of people are not aware of the new mortgage lending rules, despite them being launched several months ago.ADNFCR-1222-ID-801785313-ADNFCR

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