The Apprentice runner-up speaks out on struggle to get a mortgage.

Canadian Debra Barr does not have to travel far to run into similar mortgage struggles….

Wednesday 22nd September 2010

A former star of the TV series, The Apprentice, has spoken out about the difficulties she faced when trying to obtain a mortgage from the Halifax.

Debra Barr, 24, from Surrey, appeared on the show last year, securing third place. Following her success, she was soon headhunted and began work at Stockshifters.com – a website which sells surplus stock – where her salary equates to that of The Apprentice winner, at £100,000.Despite her income, in a report published in the Daily Mail, Ms Barr described her shock at the advance amount the Halifax offered when she tried to arrange a mortgage on a one-bedroom flat in South London.

She had already arranged a mortgage, in January, with the Halifax on a very similar property in Battersea – reserving a two-year tracker at 3.79 per cent. The purchase price was £352,500, she needed a 20 per cent deposit and had turned to her parents for help.

However, her solicitor discovered that the recent lease extension on the one-bedroom flat wasn’t complete and six months later Debra had to pull out.

So, undeterred, in June, she looked nearby and found another one-bedroom garden flat, one mile south, for £353,000 and turned to the Halifax for a mortgage. But the former reality TV star was shocked to find they would only loan her £253,000 – £31,500 less than they had agreed last time.

Speaking to the Daily Mail she said: “Thankfully my parents didn’t mind being asked for more money. But if this is how the banks treat borrowers, no wonder there are worries about a double dip – first-time buyers are oxygen to the property market.”
Some brokers have attributed apparent changes in the high street banks’ lending criteria to the Special Liquidity Scheme, which ends next year.

But Stephen Noakes, commercial director for Mortgages at Halifax, denies the bank is changing its lending criteria and told the paper: “There are two main reasons we may change the advance amount. There may have been a change to a borrower’s credit score, or they may have taken on a commitment which affects affordability calculations.”

Commenting on Debra’s situation, director of packager W&B Mortgages Solutions Lucy Barrett said: “The market has been full of changes over the last two years, and this very much demonstrates the difficulties first time buyers are faced with. It’s hard to comment on whether Halifax has made changes to their affordability criteria, it does happen, but there are a number of other factors which could affect maximum lending.

“Debra is quite right in saying that first time buyers are absolutely essential to the market. It is very difficult for first time buyers to take their first step on property ladder due to the level of deposit required, coupled with property prices still being very high in relation to incomes.

“I think it’s fair to say that most parents have to step in, but not everyone will be fortunate enough to receive that kind of help, leaving a huge number of potential buyers stuck where they are for now.”

via: www.bridgingandcommercial.co.uk