The Intermediary –- June 2026 - Flipbook - Page 23
RESIDENTIAL
Opinion
cking out
eneration?
housing affordability challenges are
most acute. However, we are seeing a
growing number of FTBs encounter
barriers that have lile to do with their
personal financial circumstances.
One significant challenge relates to
developments with a high proportion
of rented properties. A growing
number of lenders are reluctant to
lend on flats within blocks where
owner occupancy levels fall below
certain thresholds. In some cases,
mortgage applications are declined
regardless of the strength of the
applicant’s income, deposit size or
credit profile.
At the same time, surveyors
are increasingly taking a cautious
approach to valuations, with down
valuations becoming more common.
Buyers who have already secured
mortgage agreements in principle
can find themselves suddenly
facing funding shortfalls when a
property is valued below the agreed
purchase price.
The combined effect is creating
frustration for buyers and advisers
alike. Properties that appear affordable
on paper are becoming increasingly
difficult to finance in practice.
There is also a growing cohort
of aspiring first-time landlords
encountering similar challenges.
Many are looking to purchase a
flat or small house in multiple
occupation (HMO) as their first
property investment. While some
lenders are willing to support these
buyers with deposits of around 25%,
product availability remains limited
and awareness of these options is
relatively low.
This maers because private
landlords continue to play an
important role in the housing
ecosystem, particularly in
areas where demand for rental
accommodation remains strong.
Restricting access to finance for
responsible first time investors risks
reducing supply in another already
pressured segment of the market.
Taken together, these issues
raise important questions about
whether current lending policies
are inadvertently creating
barriers to homeownership and
property investment at a time
when affordability challenges are
already significant.
Lenders have understandable
reasons for exercising caution.
Regulatory requirements, market
volatility and concerns around
building quality, leasehold issues
and concentration risk all influence
underwriting decisions.
However, there is a growing
argument that blanket restrictions
on certain property types or
developments may not always reflect
the true level of risk presented by
individual borrowers or properties.
continue to have honest conversations
around property pricing. Estate
agents and homeowners need to
align expectations with market
realities. Accurate pricing remains
essential if transactions are to
progress successfully and chains are to
remain intact.
The UK housing market does not
simply need more buyers; it needs
greater mobility throughout the entire
chain. If first-time buyers cannot
access the market, the consequences
ripple upwards, restricting
transactions at every level.
For an industry focused
on supporting sustainable
homeownership, the challenge is
clear. Demand remains present.
Aspiration remains strong. The
question is whether current lending
frameworks are keeping pace with the
realities of today’s market, or whether
they are unintentionally making the
first step onto the property ladder
harder than it needs to be. ●
Responsible lending
As the market continues to adapt to a
new interest rate environment, there
may be opportunities for lenders,
valuers and policymakers to consider
whether a more nuanced approach
could improve access without
compromising responsible lending
standards. Equally, the industry must
June 2026 | The Intermediary
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