More than one in ten mortgage applications have been rejected in the West Midlands in the last five years – and the figure is set to rise, according to new figures.
The increasing difficulties facing would-be homeowners and first-time buyers across the region were revealed in a new study from financial services firm Castle Trust.
Research showed 165,000 home loan applications worth £23.8 billion had been turned down throughout the West Midlands since 2007, 11 per cent of the total of regional applicants.
The average home loan sought by unsuccessful applicants was £144,600, and nationally as much as £227 billion worth of loan requests were turned down since 2007, hitting 1.57 million people, according to the Trust.
The company warned the rejection rate was likely to rise still further, with banks having to hold more in capital reserves following the banking meltdown of autumn 2008.
Housing market expert Ray Boulger, of home loan advisers John Charcol, said: "Because lenders have so much less to lend these days it’s much more difficult.
"Even if you have a very small credit blemish on your record, something as simple as a £10 phone bill you haven’t paid, it could be enough to mean you could be rejected from a mortgage.
"The chances are, if you go to another lender that also operates a ‘computer says no’ policy, you will be declined again."
Mr Boulger urged mortgage hopefuls to check their credit file with a reference agency such as Experian or Equifax.
James Jones, from Experian, said: "Your credit report helps a prospective lender establish what credit you have at the moment and how you are using it. It also lists any credit you have used in the past six years, with details of how it was repaid. A track record of missed payments, even occasional, may be enough to convince a lender that you are not a good risk."
Earlier this year lenders GE Money said it would no longer consider applicants who had taken out short-term, high-interest payday loans in the past three months.