Mortgages  

First-time buyers should recognise current 'opportunities'

When you look at recent data around property wealth in the UK, it is not surprising that many older homeowners have capitalised on their amassed housing equity to help children or grandchildren onto the property ladder. For example, older homeowners released £3.4bn in property wealth during 2020, and one in four (27 per cent) used more than a fifth of the proceeds of equity release (or £756m) to financially support family and friends.

It is likely that this trend of intergenerational lending will persist over the long term as younger generations emerge from the crisis in a more financially vulnerable position and asset-rich older relatives look to offer them a helping hand.  

Support with cladding

Cladding is likely to be another concern for first-time buyers with many lenders unable to offer mortgages on tens of thousands of homes due to cladding fears, and prospective buyers struggling to get the finance they need as a result.

While further government support should help to resolve the issue to a certain extent, lenders are also doing what they can to support customers in this position.

However, prospective buyers must ensure that the property they are looking to buy meets the requirements of current guidance from the Ministry of Housing, Communities and Local Government. Advisers will be particularly crucial in supporting customers in this area, ensuring that every purchase made is a safe one.

While the past 12 months have come with hard-hitting challenges for younger individuals, they have also presented new opportunities. To this end, lenders and advisers will be increasingly important in supporting first-time buyers with their decision-making and ensuring that they are knowledgeable about the various routes to homeownership.

Ultimately, buying a home is one of the biggest financial commitments that a person will make in their lifetime – particularly when it is their first property.

The co-operation of lenders and advisers will go a long way towards helping to instil the confidence this community needs to take their first steps onto the housing ladder.

Vikki Jefferies is proposition director at Primis Mortgage Network