Just one third of first-time borrowers mortgage borrowers had their loans applications accepted on the first attempt, according to a report.

Aldermore bank’s First Time Buyer Index found that 35% of the 2,015 FTBs surveyed secured a mortgage offer on the first try, down from 48% pre-Covid-19, when the previous index was published.

Nearly half (45%) of prospective first time buyers say they were rejected for a mortgage once, and a further 20% say they were rejected for a mortgage more than once. 

The main reason for a rejected mortgage application was that FTBs had poor credit history (21%), followed by an administrative error (21%) and not having a large enough deposit (20%).

Half of prospective FTBs (49%) experienced disruption to their employment since the pandemic began increasing fears of credit issues and difficulty securing a mortgage, the report says.

Over a third (35%) were put on furlough but are back working now, one in ten (9%) are still on furlough currently, and 5% have either lost income or been made redundant since the pandemic began.

Aldermore head of mortgage distribution John Cooper says: “It’s easy to see from the research why many first time buyers can feel disheartened by the challenges when looking for their first home. They shouldn’t despair though as there are many options open to them. Specialist lenders, like Aldermore, are opening up the market to those with complicated income streams or past credit issues ensuring that no borrower, whatever their background, feels excluded from the opportunity of getting on the housing ladder.

“I would also recommend getting help from a broker, which can be a great boost in navigating the many pitfalls and confusing processes. They provide a whole of market view and cut through the jargon to provide options specific to a new buyers’ individual circumstances.”