April 25 - Would-be house buyers have to jump tough new hurdles in the race to get a mortgage - and face detailed personal questioning about their lifestyles. Hayley Platt reports.
Buying a new home is something many Brits aspire to. A mortgage will usually be the biggest debt they'll face. As the housing market in the UK heats up again, new rules over who can and who can't afford a mortgage are getting tougher. Buyers like Chloe Browne are likely to be asked questions on their lifestyle, to ensure they can afford higher interest rates if and when they do go up. But it threatens to slow down the buying process. That could mean Chloe and others like her could miss out on buying their dream home. SOUNDBITE: Chloe Browne, photographer and first time buyer, saying (English): "The vendor is concerned that things are taking too long, she's talking about putting it back on the market, so we might risk losing the property. So obviously the delay that we're experiencing getting all the paperwork done means that we might actually miss out on our first time buy." Some lenders could ask questions about childcare costs - and even whether borrowers are planning to have children. Or about luxuries like holidays. Or personal items like toiletries - or even if they gamble. All of which could be deducted from the monthly repayment lenders see as affordable. The regulator responsible for the rules says there are 'teething problems'. Martin Wheatley is CEO of the Financial Conduct Authority. SOUNDBITE: Martin Wheatley, Chief Executive, Financial Conduct Authority, saying (English): "If somebody thinks intrusive is being asked how much you earn and how much you spend then that's clearly more intrusive than people were used to in the past. But if it becomes very detailed, and I've heard stories about being asked about how much people spend on pet food and whether they have milk delivered or not, that sounds to me like it's gone a bit too far." Borrowers borrowing too much was seen as a factor in the UK's last property slump. Regulators say they want to ensure that's not repeated. But some lenders say the new rules may mean as many as one in five applicants could lose out. Paul Winter is Chief Executive of Ipswich Building Society. SOUNDBITE: Paul Winter, Chief Executive, Ipswich Building Society, saying (English): "Around 20 percent of borrowers if you just put them through a standard model may fail affordability. They take no account of how you might change your lifestyle. If you want the house that you want you tend to change things and cut down your expenditure to make sure you get your dream home.' The new rules have already been implemented by some lenders. Whilst its fans hope it may make lending a safer business, other say that a lengthier application process may also mean extra charges for customers.