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Mortgage slowdown disproportionately hits first-time buyers

The coronavirus pandemic has disproportionately affected first-time buyers according to Trussle research.

First-time buyer applications fell by 35% year-on-year in April and submissions dropped by 53%.

Overall applications for remortgages rose by 110% year-on-year during April, as homeowners looked to lock into lower rates.

Miles Robinson, head of mortgages at online mortgage broker Trussle, said: “As the coronavirus crisis continues to impact people’s livelihoods, those who have been furloughed are naturally likely to be concerned about their mortgage applications.

“During these difficult times, many lenders will only consider 80% of a furloughed customer’s income in affordability calculations, provided that the applicant has confirmation that they’ll be going back to work.

“As there’s a monthly cap of 80% of salary paid up to £2,500 for furloughed workers, people earning more than this will be impacted more significantly. Many lenders are also hesitant to consider overtime and bonuses at this point in time as it is certainly not guaranteed income.

“While other lenders won’t accept furloughed customers at all, we’ve seen flexibility from those who are accepting customers on furlough and we’ve helped a number of customers in this position to secure mortgages.”