Loan applications are being denied left and right. Often it is due to something as minor as a late credit card payment. Lenders are scrambling to find acceptable applicants, while borrowers are being rejected at record rates.

According to Ray Boulger, senior technical manager at John Charcol, approximately 90 per cent of all 90 LTV applications are being denied, by one major lender. Boulger then explained that the denials are a result of the computer simply declining the application. He pointed out that, the market was going through chaotic times and the return of years like 2007 was welcomed.

Boulger also said: "For borrowers it is difficult to know where to turn. Those who rely on best buy tables frequently find that they don’t qualify and most high street lenders, although Halifax is an honourable exception, try to inhibit shopping around by leaving a hard footprint even when a customer just asks for a decision in principle rather than making a full mortgage application.

This blatantly contravenes Financial Services Authority rules, with only a few footprints needed to crucify a credit score."

He further commented about where the starting point for borrowers should be. He suggested they find which lenders are prepared to lend the amount required, given the borrower’s specific profile.

He also said: "Despite six lenders dominating the market, niche building societies, alternative lenders and private banks are also active and this type of lender offers the added benefit of mostly using manual common sense underwriting by a human being."

"This allows cases to be judged on their merit, not on a generic computer model that is often unhelpful to borrowers, to say the least."