Brokers hit brick wall trying to find clients a mortgage

Stagnation in the housing market
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The Independent Online

More than two-thirds of mortgage brokers have struggled to find a home loan for clients over the past two months, according to a survey carried out by the Intermediary Mortgage Lenders Association (IMLA).

The main reasons cited by respondents are the tightening of lending criteria and the increase in deposits required.

"The lack of availability of products is affecting all parts of the market," said Peter Williams, the IMLA's executive director. "This shows how essential it is for the Bank of England and the Government to work to ease the liquidity crisis in the money markets."

Would-be first-time buyers and people with poor credit histories are the most likely to be rejected by lenders as they present the highest risk of defaulting on their home loan repayments.

One leading London broker said: "I can't see how any broker has not had to break the bad news at some point to a client that they can't get a mortgage. The situation eased for a while, but in the past couple of weeks, with the deepening of the financial crisis, it's got harder again."

In many instances, the broker added, he had advised clients looking to remortgage to remain with their current lender for the time being. The interest rate saving on offer through switching provider, he explained, wasn't worth the administration fees that would have to be paid.

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