Halifax and Experian to Help First Time Buyers

by Mark Johnston

The National Association of Estate Agents (NAEA) have stated that just 16% of  total sales in October 2011 were to first time buyers, this figure is down from 22% in September 2011. This is the biggest drop since December 2008.

With rising rental costs, strict lending criteria and high deposit demands it is nearly impossible for the average first time buyer to enter the housing market.

The Council of Mortgage Lenders (CML) revealed that gross lending in the UK slipped 1% in the last month to £12.6 million.

However it does seem that there are signs of hope for the first time buyer, although faint at the moment.

Prospective first time buyers who believe their credit reports are having an adverse effect on their chances of obtaining a mortgage are to be offered assistance by two financiers.

The Halifax and credit expert Experian have launched a new partnership designed to increase first time buyers chances of buying a house in the present climate.

This move has come despite the Halifax currently approving eight out of ten mortgage applications from first time buyers, as two of them are still being rejected. This is mainly due to their credit profile not being strong enough to get a mortgage.

Currently, unsuccessful applicants are not given any specific reasons as to why their applications were rejected.

With this new service, Halifax applicants who do not get approval for a mortgage because of their credit score will then have access to a bespoke credit expert membership.

Experian will support Halifax customers with unlimited access to their credit score and report and they will also advise these customers on what is impacting their score. Experian will also provide personalised advice on steps to improve their credit profile with expert support.

Stephen Noakes, Halifax commercial director said “lenders are limited in what we can say about someone’s credit profile and we know that has not been particularly helpful”.

Some experts believe that once the potential first time buyers understands what stopped them from being approved, they will may be able to amend the situation and therefore consequently improve their credit score, allowing them to eventually buy their first property.

With the help Experian are to offer potential buyers can:

–          understand how lenders calculate credit scores

–          make sure their credit report is accurate, by looking for possible discrepancies or clerical errors

–          help make the borrower more financially attractive to lenders

Peter Turner, managing director of Experian interactive said “this is a great way to help first time buyers get on to the housing ladder by helping them to improve their credit rating so they can make a successful application for a mortgage”.

However Halifax customers participating in this scheme will only have a 30 day free trial of the service to see if it is helpful and worth having. After this time they will have to pay for the membership even though it is at a special rate.

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