The Intermediary –- May 2026 - Flipbook - Page 34
RESIDENTIAL
Opinion
First-time buyers
need clarity as
much as choice
T
he first-time buyer
(FTB) market remains
one of the most
important areas of focus
for lenders, yet it is still
shaped by a gap between
perception and reality. While product
choice has grown, many would-be
buyers are still being held back by
simple misunderstandings.
Research from the HomeOwners
Alliance highlights the scale of this
issue. Around 65% of first-time buyers
believe bad credit automatically
rules out a mortgage. A further 62%
think a 10% deposit is the minimum
requirement, despite a steady rise in
low deposit options.
There is also confusion around
borrowing limits with nearly half of
aspiring buyers still believing they
can only borrow four to five times
their income. At the same time, 47%
focus mainly on headline rates when
comparing deals, and 40% assume
their best option is to go straight to
their existing bank.
Encouragingly, there are signs that
confidence is returning. Research
from Mortgage Advice Bureau
shows that more than half (52%) of
prospective buyers say they are ready
to buy in 2026, while 75% feel positive
about their mortgage options.
However, many are still hesitating.
Four in 10 are waiting for a clear signal
before commiing, with affordability
concerns, market conditions, and
uncertainty around borrowing limits
continuing to delay decisions.
This creates a clear disconnect.
Buyers are motivated and, in many
cases, closer to purchasing than they
realise, but a lack of clarity is holding
them back.
The MAB data also underlines the
strength of demand. Nearly half (47%)
cite stability and security as their main
32
The Intermediary | May 2026
reason for buying, while 41% want the
freedom that comes with ownership
and 37% are focused on building longterm wealth.
Yet perceived barriers remain
strong. Around 45% point to high
property prices, 44% highlight the
challenge of saving a deposit, and 31%
admit they do not fully understand
the homebuying process. This
shows that confusion and lack of
guidance can be just as limiting as
financial constraints.
Providing support
Lenders have responded to
affordability pressures by widening
access to homeownership. Higher
loan-to-value (LTV) lending has
increased, while criteria have become
more flexible in some areas.
Alongside this, there has been a
greater focus on options such as shared
ownership. This can support buyers
who are unable to meet traditional
deposit requirements by allowing
them to purchase a share of a property
and pay rent on the remainder.
65% of first-time
buyers believe bad credit
automatically rules out a
mortgage. A further 62%
think a 10% deposit is the
minimum requirement”
For many, this provides a more
realistic first step. However, it also
brings additional considerations
around eligibility, future borrowing,
and long-term plans. As a result,
DAVID LOWNDS
is head of products and
marketing at Hanley
Economic Building Society
it remains a product where clear
guidance is essential .
As product choice continues to
expand, the need for explanation
becomes more important.
Despite the growth in product
options, many first-time buyers are
still approaching the market with
limited knowledge. A quarter believe
they must secure a property before
exploring mortgage options, which
can put them at a disadvantage from
the outset.
This is where brokers play a central
role, not only in matching clients
to products, but also helping them
understand what is possible based on
their circumstances and guiding them
through options which may appear
complex at first glance.
This support is particularly
important in a market where product
choice continues to widen.
While lenders are refining their
propositions through higher loanto-value lending and more flexible
affordability approaches, these
developments only add value when
they are clearly explained and
properly understood.
Stronger communication between
lenders and intermediaries will
therefore remain essential. Brokers
need a clear view of product ranges
and criteria, while lenders benefit
from insight into how their products
are being used in practice.
By working more closely together,
the industry can ensure that product
development leads to beer access,
giving first-time buyers greater
confidence to take that first step onto
the property ladder. ●
