I’m not a very political person. So, when Boris Johnson announced last month that he wants to work out a way to help people who rent from housing associations to buy their home at a discount, I didn’t really analyse his motivation. The papers speculated that he might be worried his party is losing support from younger people, he might be paying homage to Mrs Thatcher and her Right to Buy scheme…who knows? Such a scheme could perhaps in theory help a lot of people, but as a policy only just ‘being explored’, it is likely to take a long time to come to fruition, if it happens at all. 

What might be of more direct help for all aspiring first-time buyers would be an education drive to prompt them to find out about the mortgage options available to them today – including those in the specialist sector. How many of your clients simply associate ‘specialist’ with ‘adverse’, do you suppose?  

While specialist lenders can indeed offer mortgages to first-time buyers with less than perfect credit records, there are many other ways in which we can help: Help to Buy, gifted deposits, lending on one year’s accounts for the self-employed, shared ownership, new-build offers valid for six months…the list is long.  

Spelling out these opportunities to first-time buyers is important, because their numbers are set to dwindle. After a stamp duty holiday surge which saw numbers up 35% from 2020 to 2021 at 409,370, 70% of ‘hopeful homeowners’ now say they’ll put off buying for at least two years, according to Nationwide’s ‘Home Truths’ report, published in May.  

In fact, looking at the longer-term picture, the Intermediary Mortgage Lender’s Association (Imla) reckons that, between 2007 and June 2021, there was a cumulative shortfall of 2.75m first-time buyers – the number of people who would have been expected to buy their first property, based on previous behaviours.  

Some of the factors influencing first-time buyer reticence are well known. One is the regulatory regime which limits the amount they can borrow. The second is saving up for a deposit, which is hard work, particularly when energy bills are rocketing, food prices fattening and rents have recommenced going through the roof. Saving a big enough deposit is currently quoted by 28% of aspiring first-time buyers the greatest barrier to homeownership, according to the Home Truths report. 

But these factors alone may not tell the whole story. Covid changed people’s lives and livelihoods in many ways. Post-pandemic, many more people, including first-time buyers, may no longer fit the mould required by the six biggest banks. First-time buyers approaching the high street may well take a rejection as absolute, and look no further, as they may not be aware of the solutions available to them in the specialist market. 

So, I would urge brokers to seize any opportunity they can to spell out the specialist options – not just to first-time buyers themselves who might not tick the mainstream boxes, but to other clients who may have kids looking to get on the property ladder. With Imla calculating that the average UK rent now costs 57% more than the average mortgage, surely it’s time to educate consumers about their choices?  

Adrian Moloney is group intermediary director at Precise Mortgages (OSB Group)