'One in four' unable to get a mortgage - estate agents

Nearly one in four people claim they are unable to get a mortgage due to the tighter lending criteria being used by banks and building societies, a survey showed.

Around 22.5% of people said they did not qualify for any of the mortgages that were currently available, according to the National Association of Estate Agents.

Instead 56% of the those questioned said lenders would have to relax their restrictions and lower the size of the deposit they were demanding in order for them to be able to buy a property.

A further 58% of people said they thought banks would have to lend more if the UK was to pull out of the current property slump.

The problems in the mortgage market caused by the credit crunch have led to banks demanding increasingly high deposits from borrowers, with most institutions reserving their best rates for people with at least a 40% deposit or equity stake.

There are only 119 mortgages available to people borrowing 90% of their home's value, down from 1,152 in November 2007, with some lenders charging interest of more than 7% to borrowers with a 10% deposit.

Recent figures from the Bank of England also showed that net lending, which strips out redemptions and repayments, fell to a record low of £324 million in May.

The problems in the mortgage market have intensified the housing market correction, and economists have warned that any recovery in house prices is likely to be fitful while the mortgage drought continues.

Peter Bolton King, chief executive of the NAEA, said: "We cannot let the banks convince us that shutting up shop when it comes to mortgage lending is a responsible move. The decision to restrict mortgages so severely is rooted in self interest.

"The Government must do more to put pressure on those banks that are refusing to lend, while highlighting those banks that are easing restrictions to help get the economy moving again.

"It is time to accept that responsible lending to responsible people is necessary for the country."

Opinion Matters questioned 1,800 people during June.

A spokeswoman for the British Bankers' Association said: "High street banks provide around four out of five home loans.

"This is a marked change over just a few years ago and reflects the fact that, as other lenders, particularly those specialising in customers with poor credit histories and those specialising in buy-to-let mortgages, have all but ceased to lend.

"This leaves banks providing the bulk of home loans but, because the Government requires them to keep more money back against the risk of future financial difficulties, they too have less to lend and this is reflected in the variety of mortgage products on the market."