Choices for first-time buyers

The modern first-time buyer often struggles to get their foot in the door, with rising deposits, complex income and credit histories and increased house prices getting in their way. Many commentators believe that without the right solution this group may continue to see a decline in their opportunities, but at Vida we have already taken steps to allow the property-owning dream to become a reality for many. The landscape may not look optimistic sometimes, but this group of future homeowners should know that the right support and solutions are out there in the specialist market.

The Office for National Statistics has reported that the price of an average house in 2017 rose 4.5% to £225,000. However median gross full-time earnings last year were £28,952, up only 2.1% in 12 months. Those figures mean that the average house price to earnings ratio has hit almost 8x. Despite UK Finance recently publishing statistics showing a 2.6% increase in the number of first-time buyer mortgages completed, these figures were just for the capital and not country-wide which is displaying a different scenario. Despite London’s mortgage market remaining resilient in Q3, some commentators identify that the only trajectory for first-time buyers is one of limited further gains at best and that is why it is becoming increasingly important to identify the different options available.

Vida offers a range of products and criteria for first-time buyers, including our Buy Together product, our Helping Hand joint borrower sole proprietor mortgage, 90% maximum LTV and our £15,000 minimum income proposition. Our Buy Together product for example accepts up to four applicants with all incomes considered, all we specify is that the main applicant is a minimum age of 21 - this is an instance of how we aim to make a dream home accessible to as many customers as possible. Mark Harris, Chief Executive at SPF Private Clients said that first-time buyers “are the lifeblood of the housing market, responsible for keeping the number of overall house purchase completions at a stable level.” It is this awareness that will encourage stable levels to continue.

Almost three quarters of the public (70%) believe that the difficulties young people have buying a home is one of the biggest issues the country faces. Schemes such as Help to Buy have improved the first-time buyer landscape significantly with 80% of HTB transactions being first-time buyers, and with the recently announced new scheme starting in 2021 for first-time buyers, statistically it will help more people get their foot on the housing ladder in the immediate future.

More importantly, we must ensure that first-time buyers are educated about all of the options available, so they can get onto the housing ladder and buy the property of their dreams. There is a collective opportunity for intermediaries to guide their clients into home ownership and help them understand all the options at their disposal, particularly those customers who require a specialist product.