The Intermediary – July 2026 - Flipbook - Page 17
FIRST-TIME BUYERS
In focus
The deposit lenders
are ignoring
S
aving for a deposit has
never been tougher, yet
thousands of hopeful
buyers are diligently
seing aside as much
as they can afford
every month.
The Government has launched
its consultation on the First-Time
Buyer ISA, and we’re seeing lenders
launch dedicated accounts to help
savers achieve their dream of
homeownership.
But some first-time buyers’ (FTB)
efforts can be ignored simply because
of their savings culture.
Community savings schemes are
popular among some African diaspora
communities such as Nigerians,
Ghanaians and South Africans.
Currently, however – because of
their informal, unregulated nature
and multiple participants – they
are not always an acceptable form
of deposit.
Lenders have made great strides in
improving their criteria for foreign
nationals, more recently by upping
their loan-to-values (LTV) – a clear
signal first-time buyers seling in the
UK are welcome to apply. Now it’s time
to innovate on the savings side.
The risks of informal community
savings schemes are clear given
the challenges they pose for due
diligence around the source of
funds because they come from
multiple contributors.
HELEN PIERSON
is director at MAB New Homes
Why not formalise them?
Imagine if a lender partnered with
a recognised community savings
administrator to create a verified
community saver, whereby each
contributor is veed when they join.
Or, what if they offered their own
dedicated account like a workplace
savings scheme or credit union
account called a ‘community saver
mortgage deposit’ account?
Brokers would be happy to check
in on their clients’ savings progress,
rather than turning them away for a
mortgage – like we so oen must do.
Specific criteria could include 12
months or more proven contributions
into the savings pool before they are
allowed to apply for a mortgage. And,
if the scheme has six savers, that’s
another six potential homebuyers.
Frustratingly, brokers oen have
to turn these first-time buyers away,
because of the inability to identify
origination of funds.
Communities who favour this
method can be disciplined savers who
take their financial commitments
seriously, have community
accountability, can manage their
cash flow and demonstrate long-term
planning. While there will be further
considerations, this seems to tick a
Ignoring community savings schemes could mean denying a first-time buyer cohort with strong savings habits
Community savings
schemes are popular
among some African
diaspora communities”
lot of boxes for me. So, instead of
seeing community savings schemes
as a risk, there is potentially the scope
to start making them work as an
alternative form of creditworthiness
and financial resilience.
This would be genuine innovation,
rather than tinkering around the
edges of the Lifetime ISA (LISA) and
turning it prey much back into
the Help to Buy ISA. It would open
up homeownership to creditworthy
buyers who oen don’t have recourse
to the ‘Bank of Mum and Dad’.
Some cultures value saving
together. A formalised group savings
account, locked for a fixed period,
would support longstanding cultural
behaviours whilst also meeting
the compliance responsibilities of
our industry.
This group of hardworking firsttime buyers care less about interest
rates. For them, the real value lies in
the accountability of supporting their
community, paying their share and
helping each other out.
While undoubtedly work is needed,
it would be great to see this spirit
extended more widely to community
savings schemes. ●
July 2026 | The Intermediary
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