Shift in buyer behaviour raises new opportunities - and risks - for lenders and brokers
First-time buyers are increasingly skipping the traditional starter flat in favour of larger, long-term homes - a trend that is reshaping lending profiles and affordability models across the market.
New data from Barclays shows that semi-detached houses made up a third of first-time buyer purchases in August, while flats accounted for just under 20%. As borrowers enter the market later in life - often with children and dual incomes - they are opting to buy the home they plan to stay in, rather than climb the property ladder in stages.
“Many buyers are looking to future-proof,” said Richard Jennings, of Richard Jennings Mortgage Services. “They want to avoid the disruption and cost of trading up later, and if they can afford it now, they’d rather lock in a bigger home before prices move further.”
Sadia Mehmood, of The Mortgage Mum, agreed, noting that these buyers are motivated by long-term stability. “It gives them space to grow their families without disruption, and saves on repeated legal and moving costs,” she said.
To make the move feasible, many buyers are stretching mortgage terms well beyond the traditional 25 years. Barclays told The Times that over 41% of first-time buyers are now taking loans with repayment terms of 30 years or more - a strategy that eases short-term affordability but raises long-term exposure.
Mehmood warned that extended terms can carry risks if financial circumstances change. “If affordability stress rates shift, borrowers may struggle to remortgage and could become stuck with their lender.”
Jennings echoed those concerns, adding: “Larger loans over longer periods increase the chance of buyers becoming ‘house poor’, able to cover the mortgage, but with little room for flexibility.”
The trend also has broader implications for the housing market. Higher demand for mid-tier and family homes could push prices further out of reach, while leaving smaller starter homes underused. Jennings noted that lenders may need to revisit how they assess risk and affordability in this shifting landscape.
Brokers, too, will need to adapt, not only in product recommendations, but also in how they guide buyers through long-term financial planning. With many clients now taking on more debt for longer periods, advice around future-proofing and flexibility will become more important than ever.
