Helping to overcome some ‘impossible’ issues for first-time buyers

This was highlighted in the latest data from HMRC which showed the total number of property transactions liable for stamp duty increased by 68% between Q2 and Q3, rising from 149,000 to 250,000.

The figures showed total SDLT receipts rose by 27% over the last quarter from £1.5bn to £1.9bn, largely due to the easing of the lockdown measures. Residential property transactions in Q3 were said to be 72% higher than in Q2 but remained 18% lower than in Q3 2019. Total SDLT receipts were 40% lower than in Q3 2019, due to the impact of Covid-19 and the residential stamp duty holiday. Since the introduction of first-time buyers’ relief there have been 568,000 claims that have benefited, totalling £1,344 million over the period.

This uplift is unsurprising after the immense challenges faced by the housing market during Q2, but the speed at which it has returned – while obviously exacerbated by the raising of the stamp duty threshold – has been highly encouraging. However, it hasn’t all been plain sailing. Research from Trussle outlined that almost two-thirds (65%) of first-time buyers feel it is ‘impossible’ to get onto the property ladder, with 62% opting to save for another year or more.

The survey of 2,000 first-time buyers also revealed 72% were in a position to look for a home within the next two years, but 44% of respondents felt confused by the changing deposit requirements and lender criteria.

Over three quarters (76%) of first-time buyers feel worried, confused and angered at how Covid-19 has affected their home ownership aspirations. However, the feeling is not the same in every area of the country, with first-time buyers in the North East finding it easier to get on the property ladder than those in the South.

These fears are understandable in what remains an uncertain economic climate and really does highlight the importance and value attached to the intermediary advice process.

It would be interesting to dig a little deeper into this word ‘impossible’ in this context. Does this mean such borrowers don’t believe they have a big enough deposit to finance a property purchase? Does it mean they don’t believe they have access to borrowing because of a historic or recent credit blip – such as a late payment on a credit card, mail order goods, telecommunications, utilities or unsecured loan arrears? Are they self-employed? Are they currently on furlough? Do they have complex income streams which they believe may be restrictive?

These are all questions that any good, professional adviser will ask. The same adviser will often be able to navigate a way through these issues and service these needs by securing a responsible and competitive lending solution.

A wide range of specialist first-time buyer products are available which can meet an array of borrowing needs. Many of these are designed to help reduce upfront costs for those borrowers who may be struggling to raise a deposit. And specialist lenders will continue to lead the way in helping to overcome some ‘impossible’ issues which potential borrowers may currently feel they are facing.