The Intermediary –- June 2026 - Flipbook - Page 9
RESIDENTIAL
Opinion
Beyond deposits
in the first-time
buyer market
T
he return of low
deposit mortgages
has understandably
generated headlines,
with Lloyds Banking
Group’s £5,000 deposit
product positioned as a significant
moment for first-time buyers.
It recognises a simple truth: for
many aspiring homeowners, the
biggest challenge is not monthly
affordability, but accumulating
enough cash to get through the front
door in the first place.
But intermediaries operating at
the sharp end of the market know
the reality is more complicated than
a headline deposit figure. Deposit
size may start the conversation, but
it is flexibility, underwriting and the
ability to understand real lives that
increasingly determines whether
borrowers actually complete.
The challenge with any highly
publicised low deposit proposition
is that it is usually built for a very
specific borrower. Tight property
value limits, restricted loan sizes,
high credit score expectations and a
narrow first-time buyer focus mean it
is designed for a relatively clean and
predictable profile.
Not the usual buyer
The difficulty is that today’s firsttime buyer market is anything but
predictable. Borrowers are older than
they once were, income paerns are
more fragmented, self-employment,
multiple income streams, contract
work and complex affordability
scenarios no longer constitute nonvanilla lending. They are mainstream
realities. Increasingly so, as modern
financial lives no longer fit traditional
underwriting templates.
That is why I believe the
conversation around deposits needs
reframing. Vida Homeloans’ latest
proposition takes a broader and
arguably more realistic view of
affordability. Yes, the headline figure
of up to 97% loan-to-value (LTV) is
important, particularly with lending
available up to £750,000, which moves
well beyond the property values
typically associated with mainstream
low deposit products, but the more
important point is the recognition that
the cost of moving extends far beyond
the deposit itself.
The inclusion of a £1,250 cashback
Fee Saver option directly addresses one
of the biggest pressures facing buyers
today: the accumulation of upfront
costs. Legal fees, valuations, moving
expenses and sheer day-to-day living
costs all erode purchasing power.
In practical terms, reducing those
barriers can be just as important as
shaving a percentage point off the
deposit requirement.
Rigid metrics
Mainstream lending still leans heavily
towards standardisation. Automated
scorecards and rigid affordability
metrics undoubtedly have their
place, but they can also struggle
to accommodate borrowers whose
circumstances require interpretation
rather than instant categorisation.
Vida 36 has been built with precisely
those borrowers in mind. For brokers,
that is where specialist lending
demonstrates its true value. It is not
as a niche alternative siing outside
the mainstream, but as an essential
extension of a market that has
become more financially diverse and
structurally complex.
There is also a broader point around
continuity. Many highly publicised
low deposit products are built solely
around the first purchase, but our
proposition spans first-time buyers,
DANIELLE HANCOCK
is proposition development
lead at Vida Bank
next time buyers and remortgage
customers, reflecting the reality that
borrowers’ needs evolve over time and
rarely fit neatly into a single life stage.
Features such as longer mortgage
terms of up to 45 years and
streamlined product structures
designed to reduce friction are not
simply operational tweaks. They
reflect a wider understanding that
certainty, speed and flexibility
increasingly shape borrower
experience just as much as rate.
For intermediaries, that maers.
More flexibility means more solutions
and more completed cases.
Low deposit lending will always
aract aention because it speaks
directly to one of the housing
market’s most visible barriers. But
brokers understand that successful
lending has never been about one
single lever. Accessibility without
flexibility risks creating a new type
of exclusion, where borrowers appear
close to qualifying but still fall outside
policy because their lives do not align
perfectly with standard criteria.
Specialist lenders exist to bridge
that gap by providing nuance
and interpretation. For our
intermediaries, that breadth of choice
is critical. Headline grabbing products
may open the conversation, but it is
the depth of lending options behind
them that ultimately determines
whether clients move home, refinance
successfully or secure the keys to a
first property.
In a market becoming more
complex with every passing year, the
ability to look beyond the obvious
solution is likely to become one of the
greatest advantages. ●
June 2026 | The Intermediary
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