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The Surge in First-Time Buyers: What Mortgage Advisers Need to Know

Posted on February 19, 2025 - 10:07 am by cemap

The UK mortgage market is witnessing a notable shift, with first-time buyers making up a growing share of property transactions. In 2024, the number of first-time buyers surged by 20%, reaching 341,068 purchases. This marks the highest proportion of mortgage-financed property purchases since 2014, accounting for 54% of the market. But what does this mean for mortgage advisers looking to stay ahead of the trends?

The Driving Forces Behind the Growth

The increase in first-time buyer activity can be largely attributed to:

Falling and Stabilising Interest Rates – Improved affordability has encouraged more buyers to step onto the property ladder.
Increased Lender Flexibility – More lenders are introducing low-deposit mortgage options and improved affordability criteria.
Rising Cost of Renting – Many buyers are opting to purchase rather than continue paying high rental costs with no return.

Challenges Facing First-Time Buyers

While the increase in first-time buyers is positive, challenges remain, including:

High Deposit Requirements – The average deposit needed is £61,090, rising to £125,000 in London, which remains a significant hurdle.
Cost of Living Pressures – Higher living costs make it harder for many to save for a deposit or qualify for affordability assessments.
Market Competition – With more first-time buyers in the market, competition for suitable properties remains fierce.

What Mortgage Advisers Can Do

With the surge in first-time buyers, mortgage advisers have an opportunity to capitalise on this growing demand by:

Educating Clients – Offer guidance on deposit-saving strategies and mortgage affordability options.
Staying Updated on Lender Products – Regularly review lender criteria and the latest low-deposit mortgage offerings.
Leveraging Government Schemes – Ensure clients are aware of first-time buyer initiatives such as shared ownership and First Homes.
Building Relationships with Estate Agents – A strong network can help advisers connect buyers with suitable properties and streamline the buying process.

Final Thoughts

The first-time buyer market is experiencing significant growth, presenting opportunities and challenges for mortgage advisers. By staying informed, offering tailored advice, and leveraging the latest mortgage products, advisers can better serve this expanding client base and grow their business in the evolving mortgage landscape.

Are you seeing an increase in first-time buyer inquiries? Share your insights in the comments!

The Rise of Low-Deposit Mortgages: A Helping Hand for First-Time Buyers

Posted on February 17, 2025 - 1:57 pm by cemap

Buying a home is one of the biggest financial decisions you’ll ever make, and for many first-time buyers, saving for a deposit can feel like an impossible challenge. But the good news is that mortgage lenders are now offering more low-deposit mortgage options, making it easier for you to get on the property ladder.

What Are Low-Deposit Mortgages?

A low-deposit mortgage is a home loan that allows you to borrow a large percentage of the property’s value, typically requiring a deposit of just 5% or even less. Some lenders are now offering mortgages with a 1% deposit, and in some cases, 0% deposit deals are available. These types of mortgages can be ideal if you have a steady income but struggle to save a large lump sum.

What Options Are Available?

Several lenders are stepping up to help first-time buyers. For example:

Skipton Building Society offers a 100% mortgage for renters who can prove they have been making rental payments on time for at least 12 months.
Yorkshire Building Society provides 99% loan-to-value (LTV) mortgages, meaning you only need a 1% deposit.
Vida Homeloans has introduced a 97% LTV mortgage, requiring a 3% deposit.

What Are the Pros and Cons?

Pros:

✅ Get on the property ladder sooner without waiting years to save a deposit.

✅ Avoid paying high rent while saving for a deposit.

✅ More lenders are making homeownership accessible to a wider range of buyers.

Cons:

❌ Higher interest rates compared to standard mortgages.

❌ You may need a strong credit score to qualify.

❌ If house prices fall, you could end up owing more than your home is worth (negative equity).

Who Can Benefit the Most?

Low-deposit mortgages are particularly useful for:

First-time buyers struggling to save while paying rent.
Young professionals with stable incomes but little savings.
Buyers who have financial support from family to help cover upfront costs.

Expert Opinions

Financial experts believe these mortgages could be a game-changer for many aspiring homeowners. According to mortgage advisor Sarah Collins,
“Low-deposit mortgages offer a fantastic opportunity for first-time buyers who are financially responsible but don’t have a huge deposit saved up.”

Similarly, personal finance blogger James Thornton states, “While low-deposit mortgages can be a lifeline, first-time buyers should carefully consider the long-term costs and ensure they can afford monthly repayments.”

Final Thoughts

If saving a deposit has been holding you back from buying your first home, these new mortgage options could be the solution. However, it’s important to do your research, compare rates, and speak to a mortgage advisor to find the best deal for your situation.

Are you considering a low-deposit mortgage? Let us know your thoughts in the comments!