The mortgage club has told lenders that its brokers are looking for a more personalised approach to underwriting after a number of loans were turned down for being slightly outside the lender’s usual criteria.

Paradigm added that it does not wish to see lenders taking on more risk in general, but instead considering cases with solid borrowers who have failed on a small number of points.

Bob Hunt, chief executive of Paradigm Mortgage Services, said: “From the conversations we have with our broker members, there appears to be growing frustration that, what many would deem genuinely suitable borrowers are not able to secure the finance they need.

“This is a particular problem for first-time buyers who, for example, may currently live with parents or are moving between rental addresses.

“These are often young professionals on good incomes yet in a number of cases they have not been able to get a mortgage because they do not have a mature credit history or they have insufficient employment records.”

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Hunt added that the government’s Funding for Lending scheme has brought increased competition on rates, but that mortgages were still being denied because of the ‘tick-box approach’ utilised by lenders.

“No-one is suggesting lenders return to the dark days of free and easy credit or start considering borrowers with poor credit histories, but many of our members would like to see a more commonsense approach in cases where borrowers can justify their scenarios.

“If the lending market is to really kick into gear again, then a personalised underwriting approach is just as important as attractive headline rates and innovative products at low LTV levels.

“Other member concerns lie around the number of instances when some lenders have refused any human intervention on cases where simple mistakes have temporarily affected individuals’ credit ratings.

“Even if these oversights are immediately rectified, there appears to be a reluctance to take the mitigating circumstances into consideration.”