The Intermediary – March 2025 - Flipbook - Page 51
RESIDENTIAL
Opinion
The changing face
of first-time buyers
T
he mortgage market is
evolving, and firsttime buyers (FTBs)
continue to have the
long-held ambition
of owning their own
homes – a goal that has been passed
down through generations. While this
remains a tough challenge for many in
the current environment, the desire
to become a homeowner is as strong
as ever.
Our latest research shows that
brokers are seeing growing demand
from FTBs, but with this comes a shi
in financial circumstances, borrowing
paerns, and homeownership
aspirations. If lenders are to genuinely
support the next generation of
homeowners, they must adapt to these
changing needs.
Eight in 10 (82%) of brokers have
witnessed an uptick in FTB activity
over the past year. This is positive
news, particularly given the economic
uncertainty of recent years. However,
brokers also report that today’s buyers
are steering a more complex financial
landscape, with many struggling to fit
the traditional lending criteria.
For instance, 31% of brokers have
seen more buyers with fluctuating
incomes, while 23% report an increase
in self-employed borrowers.
These figures reflect broader
changes in the way people work
– side hustles, contract roles, and
self-employment are now common
career paths. Yet, despite these shis,
many mortgage products and lending
criteria remain geared towards those
in full-time employment. If lenders
fail to adapt, they risk excluding a
significant and growing section of
potential buyers.
Financial support is playing an
increasingly vital role in helping firsttime buyers onto the property ladder.
Almost a third (31%) of brokers have
seen more first-time buyers combining
finances with family to afford a
home, while the same number report
a rise in buyers using Government
schemes like Shared Ownership and
Help to Buy.
These trends highlight the
affordability challenges facing FTBs,
reinforcing the need for lenders to
provide more flexible and accessible
mortgage options.
PRAVEN SUBRAMONEY
is chief lending officer at
Nottingham Building Society
Flexibility and innovation
The message from brokers is clear:
lenders must do more. Almost a third
(31%) of brokers stress the importance
of more innovative mortgage products
that reflect the realities of modern
borrowers. One in four (26%) also
call for a more flexible approach to
lending, recognising the broad range
of needs among today’s buyers.
Transparency around application
decisions (29%) and a more efficient
application process (41%) are also high
on the broker agenda.
Mortgage lenders have an
opportunity – and responsibility – to
drive positive change by reassessing
their approach to affordability, risk,
and product design. We must move
away from rigid, one-size-fits-all
models and instead offer solutions
that cater to borrowers with diverse
income streams, family support
structures, and alternative routes to
homeownership.
Recently, we introduced products
designed to beer support those
outside of the traditional nine-to-five
working paern. Recognising the
growing number of self-employed and
freelance workers, these products are
tailored to reflect the financial realities
of today’s diverse workforce.
With a more flexible approach to
income assessment, we aim to help
those who may find it harder to meet
the standard criteria for a mortgage,
including those with fluctuating
incomes or multiple income streams.
The role of lenders
So, what should lenders be doing?
First, we must embrace innovation,
whether that’s through enhanced
credit assessment tools, new income
verification methods, or mortgage
products tailored to the self-employed.
Digital transformation also plays
a vital role – brokers are calling
for faster application processes,
and by leveraging technology, we
can streamline underwriting and
reduce delays.
Second, lenders must work more
collaboratively with brokers. Regular
updates on products (29%) and
improved communication throughout
the application process (27%) are
areas brokers want to see improved.
Transparency and responsiveness
are key to ensuring borrowers have
a smooth and informed journey to
homeownership.
Ultimately, it’s about ensuring
homeownership remains within reach
for the new generation of first-time
buyers. By broadening affordability
criteria and adapting lending policies,
lenders can beer support today’s
FTBs – whether they rely on family
assistance, have non-traditional
incomes, or need more flexible
mortgage options.
As the needs of first-time buyers
evolve, so must the market. I am
confident that by listening to brokers,
embracing innovation, and offering
greater flexibility, we can ensure the
mortgage market keeps pace with the
realities of modern homeownership.
In turn, we can help more people
take their first step onto the property
ladder today and in the future. ●
March 2025 | The Intermediary
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