The broker view –Jeremy Duncombe managing director of Accord Mortgages interviews Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau.
They look at the crucial role played by brokers in helping first time buyers to understand their options.
Duncombe: How often do you encounter first-time buyers who don’t know what they don’t know, and what impact does that have on the advice journey?
Geddes: It happens more often than we’d like to think. Many first time buyers assume they can’t buy yet, when in reality they may be much closer than they realise.
That misconception can have a significant long-term impact. We’ve seen through our own research just how costly that delay can be, as renters could miss out on almost £340,000 in potential wealth creation over a 30-year period by continuing to rent rather than buying a home.
If someone delays purchasing by five or six years because they incorrectly believe homeownership isn’t possible, that can affect not only their financial future, but their wider life plans and opportunities.
The challenge is that many people rule themselves out before they’ve had a conversation with an adviser. By seeking guidance earlier, they often discover that what they thought was years away could actually be achievable much sooner.
That’s why early advice is so important. It helps people understand what’s genuinely possible, challenge misconceptions, and make informed decisions before they unnecessarily put their plans on hold.
Duncombe: What role do you think early education plays in helping first time buyers overcome misconceptions about deposits, affordability, and eligibility?
Geddes: Early education is absolutely crucial, as many first-time buyers rule themselves out before they’ve even explored their options.
There are still widespread misconceptions around what it takes to buy a home, whether that’s the size of deposit needed, how affordability is assessed, or whether someone is eligible in the first place.
In reality, eligibility is often far more nuanced than people realise, and goes beyond factors such as age, employment status, or how much they’ve saved.
We’ve also seen people unintentionally damage their future borrowing prospects through simple financial decisions, such as missing a mobile phone or credit card payment, without understanding the long-term impact that can have on their credit profile.
That’s why financial education needs to start much earlier than the point at which someone is actively looking to buy a home. Ideally, these conversations should begin when people first start managing their own finances, whether that’s moving away from home, entering further education, or receiving their first payslip.
Duncombe: What misconceptions do you see most often amongst first time buyers before they seek guidance?
Geddes: The most common misconception we see is around affordability. Many first-time buyers don’t fully understand how lenders assess income and borrowing capacity, so they often assume they can borrow less than they actually can. In fact, our latest research found that 50% of aspiring buyers are unaware borrowing power has improved by up to £40,000 compared to 12 months ago.
Credit is another area that causes a lot of confusion. Some buyers believe they can’t have any existing debt at all, while others assume that having credit cards or loans will automatically count against them. In reality, lenders look at how credit is managed, and responsible borrowing can often be viewed positively
