According to later life lender More2Life, this has risen from fifth position in the same period last year and was particularly the case of borrowers looking to rebroke or looking for further advances based on estimated rather than confirmed property values.
Flood risk was the second biggest reason for declines, which is up from fourth position in the same period last year.
Properties being located to close to commercial premises took third position, which is down from the top slot in Q1 2022.
The home needing significant repairs and single-skin construction rounded out the top five reasons cases we declines. Repairs was previously in second position last year and single skin was in third position.
More2Life said: “The recent uncertainty in the property market will no doubt have played a role in some of the more cautious underwriting decisions around long-term sustained value and the impact the proximity to commercial property may have.
“This view is backed up by the rise in the number of properties which are declined as there is a perception that it will ‘perform worse’ than other similar homes – due either to location or a combination of factors such as layout, poor state of repair or lack of planning regulations.”
Spray foam still a challenge
The report noted that compared to pre-pandemic lenders were more “open” to discussing flat roofs, structural issues and ex-local authority properties as these were in the top five in 2019 but have since fallen out of the top five.
It added that spray foam was still a challenge and More2Life could accept it under “very specific circumstances and the right documentations” but borrowers could “struggle”.
“This is an ongoing problem and given the increased interest in managing energy bills, the use of spray foam is expected to rise and unless regulation is introduced to protect customers and lenders, increasing numbers of people are likely to receive a nasty shock when they come to refinance,” More2Life added.
Ben Waugh, managing director at more2life, said: “Advisers are the vital link between older homeowners and lenders, so we were keen to share this data to help them better manage clients’ expectations.
“No provider likes to say no and by highlighting the impact issues such as clutter, flood risk and proximity to commercial property can have on an application, advisers will be able to have more open conversations with clients and ultimately choose a lender who is happy to say yes.”
