A couple of weeks ago, I found myself down at my local, surrounded by family, friends and the usual mix of conversation. Among the group, I was chatting with someone who was clearly very intelligent and switched on, yet when the conversation turned to what I do and to mortgages, it was clear she had very little understanding of what is available.
Despite having a clear ambition to buy her own home, she had a limited view of mortgages and what is out there today. She’s not alone – many of her friends, she said, were in the same boat. Perhaps the most striking part was her belief that getting a mortgage meant going down the high street and seeing what a bank or building society could offer.
It’s a moment that stayed with me. Because if someone like her who is very capable and very clever didn’t have a full picture of what’s available, what does that say about the broader population of first-time buyers? It’s clear that there is a massive disconnect and an urgent task for advisers and the industry more broadly.
A WIDENING KNOWLEDGE GAP
The industry quite rightly talks about affordability, supply, house prices, regulation and much more. However, it’s apparent that the growing knowledge gap among prospective buyers deserves equal attention. Many FTBs simply don’t know the options available to them to make home ownership a reality.
This is significant. Industry folk don’t need me to tell them how critical FTBs are the success of the housing market – their activity keeps the wheels moving. Furthermore, their activity allows the housing market to play its crucial role in the wider economy. Put simply, for the health and prosperity of our housing market and the economy, we need that supply of FTBs.
While recent events have created challenges, the mortgage market remains well supported with accessible options for first-timers – whether it’s products at 90% or even 100% LTV. In the new build space, you have the brilliant Shared Ownership scheme and developer-led incentives, which continue to make a difference. On top of all of this, there’s tremendous innovation from lenders and a real willingness to help put house keys into the hands of FTBs.
Yet too many prospective FTBs either assume they won’t qualify or don’t know these routes exist. Instead they might rely on outdated assumptions or snippets picked up through national headlines or social media. In today’s environment, that’s a real problem.
VOLATILITY IS NO HELP
It’s no secret that the mortgage market has been exposed to much volatility in recent years, with the conflict in Iran being just the latest example. These events inevitably feed into swap rates, lender pricing and ultimately the rates available to consumers. This is of course picked up by the mainstream titles, who often paint an overly bleak or simplified picture.
Any adviser worth their salt knows that the rate is only part of the picture. These stories always focus on the problems and unfortunately, never the solutions. It’s only right to expect this to feed into the public’s view of the mortgage market and stop some from finding out what it actually means for them.
GETTING ON THE FRONT FOOT
Standing at the coalface, there’s no doubt that advisers have a pivotal role to play. Whether it’s inter-generational traits or outdated perceptions, today’s market is far broader than the high street and far more capable to support a broad range of borrowers and circumstances. Through independent, quality advice, advisers offer access to a wide range of products, lenders and specialist solutions that aren’t visible to those who go direct.
Brokers aren’t just deal finders though – they educate, they empower, they advocate. They can explain how products work in practice, bust myths and sense check assumptions – all while making sure each borrower is given the individual guidance and tailored support they need. And yet, as my pub conversation highlights, many FTBs don’t realise this support is there.
It’s up to us to be proactive, visible and to promote and demonstrate this to potential clients. Whether it’s our digital shop window, in our marketing or within our communities, we need to meet FTBs where they are, simplify the message and reassure them that the options and support exists that can make homeownership more achievable than they might think. At Just Mortgages, we continue to support our advisers with that education piece – giving them the training and resources they need to help bridge those gaps.
That very ordinary pub chat emphasised that one of the biggest issues facing our sector isn’t product availability or pricing, it’s education and awareness. There is clearly a cohort of clever and capable people who could be stepping onto the property ladder but don’t know how or don’t believe they can. The good news is that as an industry, we have both the tools and expertise to change that.
