No one will lend to us - or will they?!

Many of Britain's would-be borrowers may wrongly assume they are excluded from the mortgage market by the extent of lenders' tougher criteria, according to research by professional advice website Unbiased.co.uk.

Several months of alarming news from the banking sector and high profile crackdowns by individual lenders appears to have left an extreme impression on the public. When asked what size deposit ‘the average borrower would need to get access to a reasonable mortgage deal', almost one in ten (9%) people said they would require a deposit of at least 40%, while 18% felt this typical applicant would be unsuccessful with any less than a 30% down-payment.

In reality however, the average deposit needed to get one of the current best buy mortgages is just under 22%. This number falls even further when looking at 5-year fixed rates, where the average deposit required is just under 19%. Londoners in particular feel the screw has tightened more severely than it has.

Confusion also exists when it comes to how many times an individual's annual income the average mortgage provider would consider lending. Over one in four (27%) Brits feel lenders would restrict a homeloan for a typical borrower to 2.5 times their annual income, while 52% believe 3 times salary is the limit. Again, Londoners are the gloomiest, with one in three (32%) expecting to be offered no more than 2.5 times their salary. In reality, whilst lenders are still being more conservative than in normal times, as a basic guide most lenders will offer between 3.25 and 4 times an individual's annual income.

David Elms, chief executive of Unbiased.co.uk, which offers a ‘Find a mortgage adviser' search, comments: "With the credit crunch in full swing and lenders tightening their lending criteria, it is not surprising that people are confused about the mortgage options available to them. Britain has been gripped by the recession doom and gloom and this has lead to an extremely pessimistic view of the mortgage market. In reality, whilst the lending criteria we have seen applied over the last few years are a thing of the past, there may well be options available to people looking to take out a new mortgage.

"Our research reiterates just how important it is in the current market conditions to seek advice from a whole of market mortgage adviser. Many people may be putting off looking for a mortgage simply because they think they won't be able to get a good deal. A whole of market mortgage adviser can look at all the mortgages available to and find the best deal not just by rate but also by income multiples and loan-to-value required."