Most wannabe first-time buyers may be far closer to homeownership than they realise according to new research that suggests a widespread disconnect between perception and the mortgage options actually available.

Research from the Building Societies Association (BSA) 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 their options. Even among those who have, nearly half (46%) have not done so in the past year.

That reluctance appears to be holding buyers back. When respondents were shown examples of building society mortgages requiring no or very low deposits, two-thirds (67%) said they would be able to buy a home sooner than they had expected.

The findings come against a backdrop of persistent 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. Affordability (64%) and saving for a deposit (53%) remain the biggest perceived barriers.

OUTDATED ASSUMPTIONS

Building societies argue that many of these assumptions are outdated. They have continued to develop flexible mortgage products designed around modern working patterns and high house prices, including low or zero-deposit loans, extended and adaptable repayment terms, and shared ownership options.

As a result, building societies now account for 35% of all first-time buyer lending. Almost half (46%) of this lending goes to borrowers under 30, nearly a quarter (23%) to buyers with deposits of less than 5%, and one in 10 (10%) to first-time buyers aged over 45.

SOCIAL CONSEQUENCES

Beyond the financial impact, delays in buying a first home are having wider social consequences. One in five (20%) respondents said they were postponing marriage or long-term commitment, 27% were delaying starting a family, and 18% were holding off launching a business until they became homeowners.

Paul Broadhead, head of mortgages and housing policy at the Building Societies Association, said: “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.”

“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.”

BETTER OPTIONS

The message is echoed by ministers. Economic Secretary to the Treasury Lucy Rigby KC MP, added: “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.”