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Average age of mortgage applicants lowest in four years


The average age of people looking to apply for a mortgage fell below 37 years old (36.9) for the first time in almost four years in April 2014.

Younger buyers seemed to be unmoved by the effects of the Mortgage Market Review (MMR) which has been designed to tighten mortgage lending regulations.

This unwavering demand from young people has come despite the MMR having an overall negative effect on demand which has seen re-mortgages fall by 12% and purchase applications fall by 7%.

Brian Murphy, Head of Lending at Mortgage Advice Bureau said the fact that younger people are applying for mortgages is a “promising sign” and that it is “a symptom of greater opportunity and movement in the market”.

He also said that there was an inevitable slow down in the run up to the introduction of the MMR, but that as mortgage applicants are up 29% year-on-year, “the mortgage market remains open for business and in far better shape than it was a year ago”.

Higher value homes driving the market

The market also appeared to be driven by higher value homes, especially in regards to re-mortgages which increased in value considerably.

The value of a re-mortgaged property increased by 6% in April compared to March, whilst the average amount of equity put forward also increased by 10% to £137,178.

Whilst purchase activity was down in numbers, the size of the average deposit did increase by 6%. The average deposit, which was £61,325 in March increased to £65,150 in April 2014.

Additionally, the average mortgage applicant applied for 2% extra finance than in March and they were hoping to buy a home worth 3% more on average.

Importance of financial advice

It has also been argued that the MMR has made getting financial advice much more important in the mortgage application process.

This has been exhibited by the rising number of mortgage products which are only available via an intermediary adviser as opposed to ones that are available direct from the mortgage provider.

In April, there were 7,942 mortgage products available via an intermediary adviser, an increase of 646 since February. This is in comparison to a decrease if 171 mortgage products available direct from the provider during the same period.

Brian Murphy said this was due to the MMR. He said: "MMR has made getting advice an integral part of securing a mortgage, and we are already seeing the consequences with a significant shift in the focus of new products from direct to intermediary channels.”

He pointed out the importance of seeking out financial advice by saying: “seeking a view on products from across the market will become the best way to find one that suits your needs.”

Need financial advice?

Are you planning to apply for a mortgage but are worried about the new rules? Contact one of our financial advisers by asking a question online or calling 0800 092 1245.

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