The Intermediary – July 2026 - Flipbook - Page 16
FIRST-TIME BUYERS
In focus
The fluctuating
challenges facing
first-time buyers
A
ffordability remains
the biggest single
barrier to entry to
homeownership for
first-time buyers
(FTBs), driven by
persistent cost of living pressures,
reduced disposable income and stricter
stress testing, with single applicants
particularly affected.
In fact, constraints on affordability
are significantly higher than pre-2022
levels, when aer lockdown things
were beginning to look up.
We are beginning to see the impact
of the Renters’ Rights Act and its
unintended consequences that have
affected many renters, would-be FTBs,
particularly in parts of the country
where the Act has led to a reduced
private rental housing supply. High
rents and reduced saving towards a
deposit may well mean more potential
buyers are stuck in a ‘rent trap’.
The number of high loan-to-value
(LTV) mortgage products that are
now available that reduce the need
for a sizeable deposit is a welcome
development, albeit these deals come
with higher pricing, tighter criteria
and consequently oen limited, but
certainly reduced choice. In other
words, less affordable.
Family financial support
Increasing reliance on family support
as a structural part of the homebuying
journey continues. Family financial
support plays a big part in our offering
at the Family Building Society.
We conduct twice yearly mortgage
intermediary business outlook
surveys. Our most recent survey found
that well over half of the brokers (59%)
noticed an increase in enquiries where
family members want to support the
mortgage or help with the moving
costs of FTBs. However, 79% said the
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The Intermediary | July 2026
desire of the younger generation to
get on to the housing ladder was as
strong as ever.
Among broker comments compiled
by the survey, were: “Owning a home
is a popular life goal for many young
people. They see influencers with their
own home and want the same,” and
“Parents are keen to get their children
on the property ladder and are helping
with deposits.”
Looking forward, brokers said low
income households (73%), first-time
buyers (54%) and the self-employed
(46%) were the groups that were at the
most risk of affordability pressures,
this summer and autumn.
Income stretch
With the continued and rising family
financial support to many FTBs,
income stretch is overtaking raising a
deposit as a key constraint.
In fact, we find that many wouldbe borrowers hit loan-to-income
(LTI) ceilings before solving the
deposit requirements, particularly
the more complex cases, such as
the self-employed. We are also
witnessing a growing mismatch
between improving rates and actual
borrowing power.
However, the recent Financial
Conduct Authority (FCA) paper
exploring a more flexible approach
to assessing borrowers with multiple
or irregular income streams,
challenging traditional underwriting,
is very welcome.
Product availability
As I mentioned earlier, the return of
higher, even 100% LTV loans, whilst
maintaining a strong focus on risk is
good news, particularly when coupled
with innovation in the market, the
acceptability of family-backed security
and borrowing and the increased
DARREN DEACON
is head of intermediary sales at
Family Building Society
popularity of hitherto niche offerings
such as joint borrower, sole proprietor
(JBSP) mortgages.
The Skipton’s Track Record
mortgage is a good example of
innovative and bold thinking. We are
seeing flexible products like these that
are being developed for non-standard
borrowers and marketed not on
price alone. There is also compelling
evidence on the importance of greater
segmentation aimed at supporting
FTBs more effectively.
Fit for purpose
It is good news that these products on the
market are designed to address the real
barriers facing FTBs and their income
and deposit constraints, particularly
relevant for younger buyers in expensive
parts of the country.
The average age of FTBs, now in
their mid-thirties, means that they are
effectively being taken into later life
lending from the outset, with mortgage
terms extending to 40 years and
beyond, even to 95 years of age in my
society’s case.
These family-backed and JBSP
mortgages have moved from niche
products to mainstream tools, helping
brokers find solutions where standard,
legacy lending falls short. It is a
market that is underserved by major
lenders that don’t want to or feel the
need to enter.
It is my view that the challenges for
FTBs are no longer one dimensional and
neither are the solutions.
The affordability of servicing a
mortgage has overtaken saving for a
deposit as the main barrier to entry,
so lenders and brokers that embrace
flexibility, family financial support and
specialist products will be best placed
to guide the next generation onto the
housing ladder. ●
