Lenders have turned down almost 9% of qualifying mortgage applications this year, compared to 2.3% in 2007.
Comparison website Moneysupermarket claimed that all the applications were vetted prior to submission and appeared to match the product criteria, but were subsequently rejected when lenders found further reasons to throw them out.
Louise Cuming, head of mortgages at moneysupermarket.com, said: “Lending criteria has become too strict – even vetted applications that we would expect to be accepted without a hitch are being rejected.
“Credit histories play an important part in the process and any blemishes will make finding a mortgage increasingly difficult. All debt repayments – credit cards, loans, store cards etc – must be made on time.
“Details of all missed repayments are held on your personal files for six years and may count against you when your credit rating is accessed.
“Assessing affordability is key for lenders and everyone has to be much more realistic about what they can borrow. The most anyone can reasonably hope for is four times their salary – anything over this is more likely to be rejected.
“And you can’t expect lenders to take overtime or commission into consideration when they assess affordability, they are likely to base the maximum lending purely on your basic salary.”
A number of lenders offer mortgages at a maximum of 90% loan to value (only requiring a 10% deposit), but unless applicants have a perfect credit history they are apparently being rejected for the slightest misdemeanours.