Options for First-Time Buyers in a Tough UK Mortgage Market

by | Tuesday 27th Feb 2024 | Mortgage News

Are there still options for first-time buyers?

Are there still options for first-time buyers?

In a recent analysis by Mortgage Broker Tools (MBT) in collaboration with Pepper Money, disheartening statistics have emerged for first-time buyers in the UK. The data reveals a stark reality: the number of affordable options for first-time buyers plummeted by 40% in 2023 meaning that options for first-time buyers have been limited significantly. This revelation comes amidst an already challenging economic climate, making the dream of homeownership increasingly elusive for many. So is it still possible for the average first-time homeowner to buy in the UK in 2024? And what mortgage options might be available?

Report Reveals Mortgage Options For First-Time Buyers Has Dropped

The MBT Affordability Report for 2023 sheds light on the hardships faced by both prospective buyers and mortgage brokers. A staggering 84% of respondents in the Pepper Money study expressed concerns that the current economic conditions would harm their ability to secure a mortgage. High interest rates, a rise in the general cost of living, and (despite recently reported price drops) an extremely inflated housing market are all factors cited. All this coupled with a general inability to save a deposit while also paying rent and forking out for expensive utility bills.

Meanwhile, 89% of brokers admitted to encountering greater difficulties in securing the desired loan sizes for their clients due to the escalating cost-of-living crisis. Mainly felt in harsh lender affordability criteria, meaning that borrowers who could have borrowed the amount then needed several years ago are now being rejected or offered a much lower loan than needed.

High Loan-To-Value Mortgages For First-Time Buyers

For first-time buyers, these statistics seem to paint a bleak picture, with options dwindling and hurdles unfortunately multiplying. The affordability crunch is particularly acute for those seeking to borrow at a 90% loan-to-value (LTV) ratio or higher, with a 40% decrease in viable options observed. Several years ago a 90% or 95% loan was not uncommon and was actually a very viable option for first-time buyers, despite rates being higher than lower LTVs.

However, nowadays if you do find a 90% or higher LTV product, not only will the rate be much higher, but often the affordability will not be able to be achieved by many. Similarly, high loan-to-income (LTI) borrowers face a 27% reduction in affordable choices. Meaning money earn just isn’t getting borrowers as far in the mortgage borrowing process as it once could.

Mortgage Broker For First-Time Buyers

Amidst these challenges, it becomes crucial for first-time buyers to seek guidance and support from experienced mortgage brokers who understand the difficult UK mortgage market. At Oportfolio Mortgages, we recognise the struggles facing first-time buyers in 2024. However, we also know the options for first-time buyers too, and we believe that with the right expertise and guidance, homeownership remains within reach. For some first-time buyers, options like shared ownership or guarantor mortgages might be something to explore with the help of a mortgage broker.

Here’s how Oportfolio Mortgages can assist first-time buyers:

  1. Tailored Advice: Our team of seasoned mortgage advisors specialises in providing personalised guidance tailored to each client’s unique financial circumstances and homeownership goals. We take the time to understand your needs and devise strategies to maximise your chances of securing an affordable mortgage.
  2. Access to Lenders: With our extensive network of lenders, including specialist providers, we can explore a wide range of mortgage options for first time buyers on your behalf. Whether you’re looking for a traditional mortgage or require a more flexible solution, we have the expertise to connect you with lenders who are willing to accommodate your requirements. Every day lenders release new products and criteria, and we can help you to get the best deal and terms for your first home purchase.
  3. Expert Negotiation: In a competitive market where securing favourable mortgage terms can be challenging, our brokers leverage their negotiation skills and industry insights to advocate for our clients. From negotiating interest rates, navigating complex affordability criteria, to speaking with estate agents to help you win a bidding war. We work tirelessly to secure the best possible outcome for you.
  4. Ongoing Support: Our commitment to our clients extends beyond securing the initial mortgage. We provide ongoing support throughout the homebuying process, from initial consultation to completion. Whether you have questions about the application process or need guidance on managing your mortgage payments, we’re here to help every step of the way.

Speak To a First-Time Buyer Mortgage Broker In 2024

Despite the economic struggles and the dwindling pool of affordable options, first-time buyers needn’t lose hope. With the right guidance and support from experienced mortgage brokers like ourselves at Oportfolio Mortgages, the dream of homeownership can still become a reality in 2024. Contact us today to learn more about mortgage options and how we can assist you on your journey to purchasing your first home.

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