The Intermediary – April 2025 - Flipbook - Page 12
RESIDENTIAL
Opinion
Addressing varied
FTB needs
G
eing a foot on the
property ladder
has become quite a
challenge for firsttime buyers (FTBs).
Rocketing house prices
and stagnant wages have made saving
for a deposit extremely hard, while
ongoing economic uncertainty has
brought about higher interest rates
and tighter credit conditions.
This has resulted in living costs
hiing an all-time high, further
squeezing household incomes and
puing the goal of homeownership
further out of reach.
Helping these FTBs, and other
would-be homeowners, has been a
key priority for Darlington Building
Society ever since it was first
established in 1856.
While the housing market has
changed significantly since those early
days, the importance of FTBs as its
foundation has remained the same.
Changing challenges
Without FTBs, second-time movers
become stuck and the property market
starts to stagnate. Therefore, evolving
mortgage products to meet the everchanging needs of borrowers is crucial
to maintaining a healthy and buoyant
housing market.
Given the challenges faced by FTBs
over the last couple of decades, it
is lile wonder that many of these
borrowers now come with varying
levels of complexity. A first-time buyer
in today’s market is not necessarily
a young person fresh out of college
looking to buy a home.
Instead, they come from all walks
of life, have multiple jobs, are selfemployed and have lived overseas.
With the average age of an FTB
now siing at 34, many may have
also studied or retrained in another
profession. Therefore, adapting
products to help these borrowers aain
their homeownership aspirations
is crucial.
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The Intermediary | April 2025
Changes in the employment market
also mean that many borrowers, FTBs
included, now have different and
multiple income sources, which is
why it is important to offer mortgage
products that reflect the different ways
in which many people now work.
Varied income streams – such as
overtime, bonuses, commissions
and bank work – can oen now be
accommodated by certain lenders,
while those on zero contract hours
and the self-employed are also more
readily catered for in the modern
mortgage market.
Similarly, FTBs with a second
and third job, or those in receipt of a
stipend or bursary, can also be more
readily accommodated, provided
they meet the minimum lending
requirements, such as six months’
minimum employment, while in
some cases, there is a need for another
income source.
The rise in self-employed workers
in the UK over the last few years
has also seen enhancements to the
product offerings available to this
FTB demographic. Many are now
able to secure a mortgage using the
last two years’ net profit as well as any
directors’ remuneration, while dayone contractors oen just require a
minimum of two years’ experience in
the same industry.
Without FTBs, others cannot climb the ladder
CHRIS BLEWITT
is head of mortgage distribution
at Darlington Building Society
A first-time buyer
in today’s market is not
necessarily a young person
fresh out of college”
One of the many phrases associated
with FTBs is the ‘Bank of Mum and
Dad’, which has played a major role
in helping many get a foot on the
property ladder. This has led to an
uptick in demand for Joint Borrower
Sole Proprietor (JBSP) mortgages,
which enable up to four applicants
to join forces to increase borrowing
power and purchase a property.
This can be extremely helpful
for parents looking to support their
children’s home-buying aspirations,
but who may not want to gi a lump
sum for the deposit in the current
economic climate.
Of course, it is important to
remember that there will also be
people living in the UK from overseas
who decide to stay and make the UK
their home. These FTBs can also
be catered for, with some lenders
offering up to 90% LTV mortgages for
those on a skilled worker visa and no
minimum time required in the UK for
foreign nationals.
Understanding the various levels of
complexity and the diverse range of
needs of the first-time buyer market is
crucial to helping these borrowers get
a foot on the property ladder. Not only
does this support product evolution,
but it also broadens the range of
product options available to FTBs,
ultimately helping more of them
achieve their property dreams. ●
