Wannabe first-time buyers could be far closer to owning a home than they realise according to new research from the Building Societies Association (BSA).
The research shows that almost half (47%) of people who want to buy their first home have never spoken to a lender or mortgage broker to explore what options might be available to them. Even among those who have, 46% have not had a conversation in the past year.
That caution appears to be holding buyers back unnecessarily. When shown examples of building society mortgage products that require little or no deposit, two-thirds (67%) of respondents said they could buy a home sooner than they had expected.
The findings come despite widespread pessimism among would-be buyers. More than half (59%) of today’s first-time buyers have less than £10,000 in savings, and on average believe it will take around six-and-a-half years before they can buy. One in three (32%) think they will never own a home, with affordability (64%) and saving for a deposit (53%) cited as the biggest barriers.
OUTDATED ASSUMPTIONS
Building societies say many of these assumptions are outdated. They continue to offer flexible mortgage products tailored to modern working patterns and high house prices, including low and zero-deposit options, longer and more adaptable repayment terms, and shared ownership schemes.
As a result, building societies now provide 35% of all first-time buyer lending. Nearly half (46%) of this lending goes to borrowers under 30, almost a quarter (23%) to buyers with deposits of less than 5%, and one in ten (10%) to first-time buyers aged over 45.
IT’S NOT OFF THE TABLE
Paul Broadhead, head of mortgages and housing policy at the Building Societies Association, says: “Too many aspiring first-time buyers assume homeownership is off the table without ever checking what is actually available to them.
“This research shows that’s a mistake! When people explore the kinds of mortgages building societies offer, many realise they could buy sooner than they thought.
“Building societies have been helping people into their first homes for more than 250 years and that hasn’t changed, we’re still innovating, still flexible and still focused on real people and the challenges they face.
“A simple conversation with a building society or mortgage broker could open doors that you may not realise were there.”
TAKE ANOTHER LOOK
Economic Secretary to the Treasury Lucy Rigby KC MP adds: “Too many people are giving up on owning a home before they’ve even spoken to a lender – believing that getting the keys to their own place is out of reach.
“But now that there are more attractive and flexible products on the market, it’s right that people are encouraged to have another look to see if there might be an option which works for them.”
