The Intermediary – October 2026 - Flipbook - Page 18
RESIDENTIAL
Opinion
Don’t ditch the
avocado toast
M
illennials and
Gen Z have been
repeatedly told
that avocado on
toast and to-go
coffees were going
to have a detrimental impact on their
ability to purchase a property. But in a
world where the rising cost of living is
meaningfully impacting their ability
to save for a deposit, should they just
drink the fancy coffee anyway?
Help to Buy supported more
than 300,000 home purchases and
was responsible for around one in
seven additional new homes built in
England. The evaluation calculated
that it cost around £3.6bn while
generating an estimated £25.1bn in
net present social value. Nearly half
of those who used it said they would
not have been able to buy without
the scheme.
Those are significant findings. But
they do not necessarily make the case
for simply recreating Help to Buy. The
environment has changed since then,
plus with the rise in ‘finfluencers’ and
those offering advice online, where do
people turn to know what’s right?
The benefits were also stronger
among higher earners, and the
scheme was less effective at resolving
affordability for lower-income
households. The Financial Times
reported that it may also have
increased house prices by around 2%.
Which by any standard means that
TikTok Shop and online food trends
were never the problem.
The affordability challenge facing
today’s first-time buyers (FTBs) is not
one-dimensional. A deposit maers,
but so do income, property prices,
mortgage rates, lender criteria,
employment circumstances, credit
history, location and the buyer’s
understanding of what is actually
available to them.
The latest Mortgage Lenders and
Administrators Statistics show
that the share of gross mortgage
16
The Intermediary | October 2026
advances above 90% loan-to-value
(LTV) reached 8.4% in Q2 2026, the
highest proportion since Q2 2008.
Lending above 75% LTV accounted for
47.5% of advances, the highest share
since Q4 2007.
Those comparisons inevitably
aract aention, particularly when
2008 appears in a headline. But
context is essential.
Lending above 95% LTV accounted
for just 0.5% of advances in Q2. At
the same time, outstanding mortgage
balances in arrears fell 7.3% year on
year to £19.7bn, while new possessions
were 15.6% lower than a year earlier.
There are signs of change elsewhere,
too. The proportion of lending to
borrowers at higher loan-to-income
(LTI) ratios reached 46% in Q2, 4.6%
higher than a year earlier.
Navigating affordability
The FT has separately reported that
the number of first-time buyers
borrowing more than 4.5-times their
income rose 66% in 2025 to 45,800,
while mortgages above 5.5-times
income increased tenfold to 4,628.
That doesn’t mean affordability
has suddenly been solved. It suggests
lenders are finding different ways of
assessing and supporting borrowers
who do not necessarily fit yesterday’s
assumptions about what a first-time
buyer looks like – and indeed for those
partial to a few overpriced coffees.
The world has changed, earning
potential has changed, and the chance
of a complicated mortgage journey is
only going to increase.
There is clearly demand. The
challenge is turning that demand into
sustainable homeownership.
Lloyds says many prospective buyers
rule themselves out before they even
apply. Its research found that 58% of
first-time buyers wrongly believed
existing debt would prevent them
from geing a mortgage, while 37%
thought a 20% deposit was essential.
Other perceived automatic barriers
ELLISHA JADE
is PR, social and events
manager at Twenty7tec
included using an overdra, receiving
benefits, changing jobs, having an
imperfect credit score and being
self-employed.
At the same time, the way firsttime buyers educate themselves is
changing. Barra Homes found that
68% would trust a mortgage broker as
a source of mortgage information, but
64% would use online searches, 57%
would turn to family and 21% would
trust artificial intelligence (AI).
Having more information available
should be a positive development. But
information and advice are not the
same thing.
There is another complication:
the mortgage market a first-time
buyer enters at the beginning of their
journey may not be the same one they
face several weeks later.
Twenty7tec data published earlier
this year showed 2,503 lender update
requests resulting in more than
450,000 individual mortgage product
amendments. The scale of that change
illustrates the environment advisers
are working within a suitable option
identified today cannot simply be
assumed to remain unchanged
throughout the journey.
A future equity scheme could form
part of the answer. So could greater
availability of low-deposit mortgages.
The lesson from Help to Buy should
therefore be bigger than whether one
particular scheme worked. Removing
one barrier can materially change
behaviour. The challenge now is
recognising that today’s first-time
buyers face several barriers at once.
There probably isn’t one solution to
affordability. That may be precisely
the point. Buy the coffee and enjoy the
avocado toast. ●
