SPF’s Mark Harris calls for stronger support as first-time buyers and remortgagers face mounting pressures
The supply of mortgage credit is improving and lenders are sharpening their pricing, but first-time buyers remain blocked from the housing ladder by deposits and affordability pressures, Mark Harris has warned, in response to the Bank of England’s latest Credit Conditions Survey.
The Q4 2025 survey shows lenders increased the availability of secured credit to households, with a net balance of 30.3 in the three months to the end of November, although this is expected to ease to 9.1 in Q1 2026. Demand for secured lending for house purchase fell sharply, with a net balance of -13.9 in Q4, down from 0.7 the previous quarter.
At the same time, mortgage spreads narrowed in Q4 and are expected to narrow further in Q1, underlining the recent wave of rate cuts. Default rates also fell and are expected to decline again in the new year.
Against that backdrop, Harris, chief executive of SPF Private Clients, warned that improving credit conditions risk bypassing the borrowers the market most needs to support.
“First-time buyers are the lifeblood of the housing market, so it’s vital that they are given support in getting on the ladder,” he told Mortgage Introducer. “Without them, second steppers and beyond can’t move up the ladder, jamming up the market and reducing social mobility.”
Deposits and the “Bank of Mum and Dad”
Harris said the main blocker remains raising a deposit, particularly in London and the southeast.
“With wage growth failing to keep pace with property price increases and rising rents, first-time buyers without financial assistance from the Bank of Mum and Dad may not be able to save fast enough,” he said.
While lenders have launched more high-LTV products, Harris argues that this only goes so far.
“Lenders are doing their bit by offering more choice at higher loan-to-values, at competitive rates,” he continued. “But the high cost of living makes it hard to save significant sums, particularly for those who don’t have family help.”
Parental support and product innovation
He pointed to growing interest in products designed to harness parental wealth.
“For example, the Barclays Springboard mortgage allows first-time buyers to utilise parents’ savings to offset the lender’s risk and borrow at lower rates than would usually be available,” he said.
“Joint borrower/sole proprietor mortgages are also proving increasingly popular, where parents can support the borrower, making affordability achievable.”
But he said private innovation will only go so far without policy support. “The Government should also be offering assistance to help first-time buyers – either in the form of further stamp duty concessions or a revised Help to Buy scheme.”
Payment shock looms for remortgagers
Demand for secured lending for remortgaging was broadly flat in Q4 but is expected to pick up meaningfully in Q1, to a net balance of 17.4.
“A large number of people are due to remortgage this year, and while rates have eased recently, many borrowers coming off low five-year fixes will face a payment shock,” Harris said. “Leading two-year fixes are now available from 3.5 per cent while five-year equivalents start from just over 3.7 per cent, with further gradual falls expected.”
He added that lender flexibility and broker advice will be crucial. “We find that lenders are often prepared to be flexible when asked about term extensions and/or switching to interest only. Advice from a broker this year will really come into its own.”
Balancing appetite to lend with real-world constraints
The BoE survey paints a picture of lenders keen to write business even as buyer demand softens and cost-of-living pressures linger.
Credit is loosening and product innovation is accelerating, Harris said, but without targeted support on deposits and affordability, many aspiring homeowners risk remaining on the sidelines.
“In theory, this should be a more supportive environment for borrowers,” he concluded. “But unless we tackle the deposit barrier and give first-time buyers meaningful help, the benefits of easier credit risk passing them by – and that’s a problem not just for them, but for the health and mobility of the entire market.”
