Study shows many potential homebuyers have not spoken to a lender or broker despite flexible products on offer
A large share of aspiring first-time buyers may be nearer to securing a mortgage than they believe, but many are not engaging with lenders or brokers to test their assumptions, new analysis from the Building Societies Association (BSA) has indicated.
According to the research, almost half (47%) of people who wish to buy their own home have never spoken to a lender or mortgage intermediary about what they might be able to borrow. Among those who have sought advice in the past, around half (46%) have not done so in the last 12 months.
When respondents were shown examples of building society products with low or no deposit requirements, two-thirds (67%) of prospective first-time buyers said they could purchase a property sooner than they had expected, pointing to a clear disconnect between perceived and actual options.
“Too many aspiring first-time buyers assume homeownership is off the table without ever checking what is actually available to them,” said Paul Broadhead (pictured right), head of mortgages and housing policy at the Building Societies Association.
“This research shows that’s a mistake! When people explore the kinds of mortgages building societies offer, many realise they could buy sooner than they thought.”
More than half (59%) of those aiming to buy their first home hold savings of under £10,000. On average, they expect it will take about six and a half years before they are in a position to purchase, while nearly one in three (32%) do not believe they will ever own a home.
Financial issues dominate as perceived barriers. Affordability was cited by 64% of respondents as a key challenge, with 53% highlighting the difficulty of building a sufficient deposit.
BSA said building societies are positioning their lending strategies around these constraints, using a range of products that take into account high house prices and varied employment patterns. According to the figures, building societies accounted for 35% of all first-time buyer lending. Of that lending, 46% went to borrowers aged under 30.
“Building societies have been helping people into their first homes for more than 250 years and that hasn’t changed, we’re still innovating, still flexible and still focused on real people and the challenges they face,” Broadhead said. “A simple conversation with a building society or mortgage broker could open doors that you may not realise were there.”
The research also suggests that delays in getting onto the housing ladder are shaping wider life choices. While many respondents see homeownership in practical terms – seeking greater stability (53%), having their own space (49%) and not paying rent (47%) – they also report deferring key decisions.
One in five (20%) said they were postponing committing to a partner or getting married until they became homeowners. More than a quarter (27%) were delaying starting a family, and around one in five (18%) said they were putting off launching a business.
The study also highlights gaps in understanding of the mortgage process and criteria. Almost half of would-be first-time buyers want clearer information about the types of product available (48%) and the level of deposit required (44%). Nearly one in three (29%) are unsure who they should approach first or how to improve their credit profile.
Mortgage professionals are viewed as the most trusted source of guidance. A majority (53%) regard mortgage advisers as the best place to seek information, followed by financial providers at 43%.
“Too many people are giving up on owning a home before they’ve even spoken to a lender - believing that getting the keys to their own place is out of reach,” said Lucy Rigby, economic secretary to the Treasury.
“But now that there are more attractive and flexible products on the market, it’s right that people are encouraged to have another look to see if there might be an option which works for them.”
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