First-time buyers face challenging conditions at the best of times, but the pandemic is heightening the difficulties many are experiencing in the UK.
Our First-Time Buyer Index, a recurring survey of 1,000 prospective new buyers, found that 87 per cent are currently finding the process difficult and nearly two-thirds find it confusing.
Due to the pandemic, two-fifths now say the process is even harder than before.
More than half (62 per cent) feel that buying a home is unachievable for them, while 74 per cent say owning a home is a key life goal.
There is much potential first-time buyers will need to unpack in a short time as they are seeing the housing market rapidly adjust to a new normal.
Many are now needing to raise a bigger deposit, some on furlough are finding it difficult to get a mortgage, property choice is diminishing in some regions and product offerings are becoming sparser, particularly at the high loan-to-value end.
This is all making a confusing process tougher than before.
What first-time buyers need is guidance and our survey shows this is where brokers can be a real help.
Of the future first-time buyers we asked, 91 per cent said they found advice they received from brokers to be useful – an overwhelmingly positive response.
However, the problem lies in the amount that are going to see brokers: only 14 per cent of prospective first-time buyers have seen a broker at this point in their journey.
This means a huge majority are missing out on advice that might be vital to easing the process for them.
Lenders need to be recommending brokers to first-time buyers no matter how early on they are in the process.
Brokers have a duty of care to ensure borrowers have sufficient life protection in place. It is vital to take care in looking at the whole package, rather than just focusing on mortgage rates.
Brokers provide first-time buyers with whole-of-market knowledge, understanding of the complicated processes and the ability to advise new buyers on their options for a mortgage based on their individual circumstances. All of which will be crucial in getting the market moving again after the stalling caused by lockdown.
This also makes strong business sense. A survey Aldermore carried out in March of first-time buyers who had bought in the past three years showed that 94 per cent would recommend their broker to others and 92 per cent would use their broker again when it is time to remortgage.
The service brokers are providing is excellent according to new buyers, and this generates loyalty and return business.
There are also wider opportunities for brokers in this market.
Our research found that nearly one quarter of parents that are helping their children raise a deposit will do so through use of their property, in the form of remortgaging or releasing equity in their property, selling a second/investment property or even moving and downsizing.