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First time buyers now have more options when it comes to purchase
For those individuals who, up until now, have only dreamed of extricating themselves from the rental market or indeed their parental home to get on the property ladder, there appears to be a growing amount of evidence to suggest the tide might be turning in their favour.
There are a whole array of facets and obstacles to overcome before purchasing a first property, but last year, first-timers were the biggest purchasing demographic and it looks as if 2023 might produce the same result.
According to a recent Hampton’s Market Insight report, the share of homes being bought by first-time buyers continues to rise year-on-year. In 2023, it is already up to 27%, an improvement on last year, and according to the agency’s statistics, there has been a steady rise in numbers for the best part of a decade.
That said, first-timers were certainly not done any favours by last year’s ‘Mini Budget’ and the rise in mortgage pricing has needed to be factored into any plans, particularly around affordability and the type of properties first-timers are now more likely to be purchasing.
Hamptons says figures in 2023 show that, for the first time in over a decade, first-time buyers are opting to purchase smaller homes in more affordable locations, with one/two-bedroom homes being favoured over larger properties.
Clearly, there has been a lot of focus on the options for first-time buyers in recent weeks and a specific focus on those currently renting, who would be able to afford a mortgage but are not in a position to put down the deposit required.
What advisers, and their prospective first-time buyer clients will also continue to need, is product options that make the most of the income they have and the much more complex income streams that large numbers of people have nowadays.
As we’ve seen, it’s one thing to have a deposit to put down, but it’s another to be able to secure a mortgage, particularly from the mainstream - for those with unusual sources of income, multiple incomes, are newly self-employed, or are currently on a low starting salary but in a ‘professional’ career that will see significant increases in income in the future.
Take a look at our residential borrower case studies
It's why we have a specialist residential sector, and lenders like ourselves, who cater to these types of first-time buyers, the differing working circumstances they have or the different ways they earn, with criteria and products that work for them. As well as our eminent manual underwriting for residential cases with layered complexity, we also offer products up to 85% LTV and £750,000 maximum loan for first-time-buyers and non-first-time-buyers alike.
If we’re currently at the point where it’s achievable for more people, then we all have a duty to make sure we are delivering the advice and the mortgages they need to make the most of this situation. It may not last forever.
*This article was originally published on Mortgage Solutions
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