The Intermediary – July 2025 - Flipbook - Page 32
RESIDENTIAL
Opinion
Working together
to improve
affordability
A
ffordability remains
one of the biggest
challenges for an
array of borrowers
across the mortgage
market. Whether it’s
first-time buyers struggling to raise
a deposit, or existing homeowners
looking for their next move, the cost of
geing on – or staying on – the ladder
is more acute than ever.
When it comes to the laer,
the latest ‘Property Insights’ data
from Barclays shows that 29%
of mortgage holders have either
recently remortgaged or plan to do
so in 2025. For many, it’s not an easy
financial transition. Nearly threequarters (72%) expect their monthly
repayments to rise – by an average of
£331, or close to £4,000 a year. This
is mainly due to the expiry of 5-year
fixed-rate deals taken out during a
period of historically low interest
rates, now reverting to higher tariffs
despite recent base rate cuts.
More than a third of those
refinancing this year are considering
longer-term fixed rates, while others
are looking at variable options in
the hope of further reductions. But
affordability remains a pressing
issue – one that demands urgent,
systemic response.
The deposit dilemma
Renters, especially younger
generations, continue to face one
significant barrier to homeownership:
the deposit. More than four in 10
(44%) cite it as one of the main
obstacles. Gen Z and Millennials are
puing away what they can – £191 and
£313 a month respectively, on average
– but most expect to save for nearly
five years. This long lead time delays
buying a home and increases financial
pressure during key life stages.
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The Intermediary | July 2025
Many are going beyond costcuing, turning to extra work (31%)
or launching side hustles (40%)
to hasten their savings. Still, the
majority believe their homeownership
ambitions are unaainable without
family support, with 58% citing
inheritance or parental help as a
necessity, highlighting the importance
of intergenerational transfers.
Interestingly, some relief may lie in
current market dynamics. Our data
suggests that those in the process of
selling or who have sold a home in
the last 12 months (4%) are accepting
an average of £6,818 under the
listing price.
This suggests that buyers could
be negotiating harder, although not
all sellers are willing to budge – one
in seven (15%) say they would not
entertain offers under the asking
price. Although this does signal
a buyer’s market, it’s still one
that demands financial creativity
and lending flexibility to make
homeownership a reality.
Driving affordability
While affordability pressures cannot
be solved overnight, lenders have
an important role to play. Solutions
must be both practical and inclusive.
Barclays, for instance, has recently
introduced enhancements to our
affordability calculations, reducing
stress rates on residential purchase
and remortgage applications.
This change alone could boost
borrowing potential by up to £30,750,
making a significant difference
for families and individuals facing
affordability cliffs.
To tackle the deposit hurdle, we
have innovative solutions such as our
Family Springboard offering, which
allows friends or family members to
support those struggling to save for
LEE CHISWELL
is head of mortgages
at Barclays UK
Affordability remains
a pressing issue – one
that demands urgent,
systemic response”
a deposit with their own savings –
earning 1.5% above Bank of England
Base Rate while doing so – without
having to gi a deposit to the buyer.
For those struggling with income
thresholds, solutions like Joint
Borrower, Sole Proprietor offer
flexibility by allowing a family
member’s income to support the loan,
without adding them to the property
title. It’s a forward-thinking option,
particularly for first-time buyers or
those undergoing life changes.
Looking ahead
As the market continues to evolve,
lenders, intermediaries, and
policymakers must collaborate to
build pathways to homeownership
that reflect today’s economic realities.
From offering innovative lending
products to accelerating affordable
housing supply, solutions must be
multi-faceted.
Mortgage affordability may still
be a challenge, but it’s one that can
be tackled – not just with beer
rates, but with beer thinking. By
aligning innovation with empathy
and flexibility with responsibility, we
can help ensure that homeownership
remains not just a dream, but an
achievable goal for millions. ●
