A Building Societies Association (BSA) survey showed credit conditions are still tight but are viewed as easing for the 2,000 buyers surveyed, with less than half saying this was an obstacle in September, down 13% on the previous year.
However, 21% of respondents thought their incomes were probably too low to afford a mortgage, but only a small proportion had done some research or sought advice to test the theory.
Research showed 16% were put off because news stories reported a lack of mortgage lending by banks and building societies, 16% thought their deposits were too small and 14% feared being turned down for a mortgage.
In fact, just 3% had applied for a mortgage and been turned down, and 4% had spoken to a broker or lender or done other research and concluded they might not get a mortgage.
For first-time buyers, 29% feared their deposit is too small, where 23% were scared of being turned down for a mortgage. An extra 13% said they had been put off by stories in the press.
Paul Broadhead, head of mortgage policy at the BSA, said: “Although mortgage availability has undoubtedly reduced since the start of the financial crisis, some lenders such as building societies and other mutuals have actually increased their lending to all types of borrowers, including first-time buyers, over the last year or so.”
Broadhead said lending by mutuals was up 39% against the same period last year, with lending for borrowers with deposits of 15% or less up by 27%.
