The Intermediary – February 2025 - Flipbook - Page 6
RESIDENTIAL
Opinion
Challenges and
opportunities
M
ortgage
affordability has
experienced many
fluctuations over
the years, driven
by a wide-ranging
set of economic shis and market
variables.
These dynamics have widened
the gap between two key aspects
of affordability: geing onto the
property ladder and managing current
mortgage payments. This dichotomy
underlines the complexity of today’s
mortgage market, and the crucial role
intermediaries play in guiding clients
through it.
Saving challenges
For first-time buyers (FTBs), saving
for a deposit remains a significant
challenge. Many still rely on the
‘Bank of Mum and Dad’ to make
homeownership possible, with recent
data from Barclays Property Insights
showing that 57% of renters believe
it would be impossible to buy a home
without an inheritance or loan from a
family member.
However, cautious optimism is
emerging as renters adopt disciplined
When identifying
the three biggest barriers
to homeownership,
significant obstacles
remain for renters. Twofifths (40%) of respondents
cited property prices,
while 37% pointed to
the amount needed for
a deposit”
6
The Intermediary | February 2025
savings habits, with 35% of renters
able to save independently for a
deposit, and 17% saving with a friend
or partner to share the cost. This trend
is supported by the soening of house
prices and impending Stamp Duty
changes, motivating buyers and sellers
alike to act quickly.
When identifying the three
biggest barriers to homeownership,
significant obstacles remain
for renters. Two-fihs (40%) of
respondents cited property prices,
while 37% pointed to the amount
needed for a deposit. Rising rents
further hinder savings, making it
increasingly difficult for many to
enter the market.
Evolving trends
The data further outlined that rent
and mortgage spending increased 1.8%
year-on-year in December, the lowest
rate of growth since August 2024.
Though encouraging, costs
continue to increase, and consumers’
confidence in their ability to
afford their rental and mortgage
payments dropped to 52% (down
three percentage points) – the lowest
level in 2024.
Meanwhile, remortgaging activity
has slowed as homeowners explore
rate-switching options with their
existing lenders.
Extended mortgage terms are
becoming more common, reflecting
borrowers’ need for greater
affordability. This trend is likely to
persist, marking a long-term shi in
borrower behaviour.
Innovative solutions
In this challenging environment,
lenders and intermediaries have
a unique opportunity to support
FTBs through a range of innovative
mortgage solutions. 29% of new
homeowners have used firsttime buyer schemes to assist
their purchases, highlighting the
importance of alternative pathways to
SIAN MCINTYRE
is head of acquisition
and engagement
at Barclays UK Life Moments
homeownership. For example, Joint
Borrower Sole Proprietor (JBSP)
mortgages, such as Barclays’ Mortgage
Boost program, allow family members
or friends to enhance a buyer’s
affordability without being listed on
the property title deeds.
With the Property Insights report
stating that 22% of renters believe
homeownership is achievable within
five years, solutions like Mortgage
Boost could make a significant
difference. Applicants can use a
family member’s income to increase
borrowing capacity while maintaining
sole ownership of the property. This
approach is versatile, benefiting FTBs,
movers, and those remortgaging due
to changes in circumstances.
The road ahead
Looking ahead to 2025, despite
ongoing affordability challenges,
the UK housing market continues to
demonstrate its resilience. Activity
levels remain robust, with one in six
existing homeowners (16%) intending
to relocate this year and one in 10
(9%) now considering previously
unaffordable properties in more
desirable areas to be within their price
range. Topping the list of priorities
among prospective buyers are garages
or driveways (40%), gardens (39%),
and functional spaces (32%), such as
pantries or utility rooms
For intermediaries, these trends
highlight the importance of staying
informed, leveraging innovative
solutions, and maintaining strong
relationships with lenders.
By providing tailored support,
intermediaries can help more clients
achieve their homeownership dreams
and contribute to a vibrant and
sustainable property market in 2025
and beyond. ●
