The Intermediary – July 2026 - Flipbook - Page 26
FIRST-TIME BUYERS
In focus
A different kind of
first-time buyer
F
irst-time buyers (FTBs)
only make up a relatively
small proportion of those
purchasing a property in
Prime Central London,
but there are some
interesting dynamics nonetheless.
Unlike a typical FTB, struggling
to save for a deposit, many entering
this market are supported by
significant family wealth. Some
will be international students whose
families prefer property ownership
over rental fees. Others will be young
professionals working in the City,
building careers while receiving
financial assistance from parents
to secure a foothold in the capital’s
property market. At Buerfield
Mortgages, it is rare for us to see FTBs
earning enough to purchase in Central
London without family support,
although occasionally it does happen.
The affordability challenge
that faces many FTBs looks very
different for our clients at Buerfield
Mortgages. In many instances,
affordability is assessed not only on
the individual’s financial position but
on the wider family, too. Parents may
be providing financial support without
wanting to appear on the mortgage,
and this requires looking beyond
traditional underwriting metrics.
Understanding the source of wealth
is critical and extends beyond the
immediate transaction to examine the
sustainability of the arrangement over
the life of the loan.
Questions arise around how a
borrower would continue to service
the mortgage should circumstances
change or anticipated wealth transfers
not materialise when expected.
That makes the calculations more
complex, which oen requires
more bespoke solutions. Additional
collateral, interest service reserves or
other forms of security may be utilised
to ensure borrowers remain protected
and financially resilient in a variety
of scenarios.
24
The Intermediary | July 2026
Stamp Duty is another important
consideration, particularly for
international buyers. While the costs
can be significant, they are generally
factored into purchasing decisions
from the outset. Buyers operating
in Prime Central London tend to
approach these transactions with a
clear understanding of the associated
tax implications and incorporate it
into their overall financial planning.
A market unlike any other
Much of the recent commentary
surrounding the Prime Central
London market has focused on
stagnation. While transaction
volumes have undoubtedly slowed,
that narrative only tells part of the
story. The market’s challenges are not
primarily driven by falling property
values. Instead, they stem from a
reduction in liquidity and demand.
The pool of active buyers is smaller
than it has been historically, with
international demand in particular
having soened considerably.
This shi has altered the balance
of power in negotiations. Buyers
who remain active in the market
recognise the opportunities available
to them and are oen negotiating
aggressively on price. For buyers with
access to family support or long-term
investment horizons, this presents
a potentially aractive window of
opportunity. Properties that may have
seemed unaainable a few years ago
are now available at more negotiable
pricing levels, while the volume of
stock on the market has increased
significantly. Owners looking to sell
are oen more willing to engage in
meaningful negotiations, creating
opportunities that have been rare in
Prime Central London for much of the
past decade and a half.
The changing buy-to-let (BTL)
landscape is also contributing
to this trend. As some landlords
exit the sector, additional stock is
becoming available, broadening
ALPA BHAKTA
is chief executive officer
at Butterfield Mortgages
the choice available to prospective
owner-occupiers.
London remains one of the world’s
most desirable cities in which to
live, work and study. While current
market conditions present challenges,
they also create opportunities for
those able to enter the market at a
more favourable point in the cycle.
For many buyers, particularly FTBs
with access to support, the long-term
outlook remains compelling.
The role of specialist lenders
Adapting to a more complex market
requires lending solutions that move
beyond standardised affordability
models. At Buerfield Mortgages,
competitiveness has increased
significantly, with pricing becoming
increasingly aractive, while
maintaining a focus on bespoke
underwriting.
Rather than relying solely on
conventional income multiples,
assessments take a client’s full
financial profile into account. This
includes wider assets, income streams
and overall wealth position.
Flexibility is particularly important
when dealing with HNW and
internationally mobile borrowers,
as their financial profiles are
unlikely to fit traditional lending
criteria. Solutions such as interest
capitalisation can provide additional
flexibility, provided borrowers can
clearly demonstrate their ability to
sustain their lifestyle and manage
future interest rate movements.
This is where specialist lenders,
private banks and experienced brokers
add the greatest value. Complex
cases require a holistic view of a
borrower’s financial position and the
ability to structure solutions around
individual circumstances. ●
