Research from Nottingham Building Society shows growing demand for flexible mortgage products
First-time buyer activity has grown over the past year, yet mortgage brokers believe lenders need to adjust to shifting financial and lifestyle patterns, according to new research from Nottingham Building Society.
The study found that 82% of brokers have seen an increase in first-time buyer activity. However, many noted that changes in borrower circumstances are not being adequately addressed by the current market.
Nearly a third (31%) of brokers observed more buyers with fluctuating incomes, while 23% reported a rise in self-employed applicants. These findings underline the need for lenders to offer more flexible mortgage products that cater to borrowers with non-traditional income streams.
Additionally, a growing number of first-time buyers are relying on external financial assistance. A third (31%) of brokers saw an uptick in multi-generational buyers pooling resources. The same percentage also reported higher use of government support schemes such as Help to Buy and Shared Ownership.
While demand from first-time buyers remains strong, brokers believe lenders must evolve to meet these changing needs. One-third (31%) of brokers surveyed highlighted the necessity for more innovative mortgage products tailored to diverse borrower circumstances.
The research also revealed that 26% of brokers want lending criteria to become more adaptable, reflecting the wide-ranging needs of modern borrowers. Transparency in application decisions was flagged as a key area for improvement by 29% of respondents.
Process delays remain a concern. Four in 10 (41%) brokers said mortgage applications are taking as long — or longer — than they did two years ago. Brokers also identified the need for more frequent and clear updates on product offerings, a faster and more streamlined application process, and greater adoption of new technologies to enhance application procedures.
“Brokers are telling us that first-time buyer activity is on the up, but that the financial – and lifestyle – needs of these buyers are evolving, which means the market must too,” said Praven Subbramoney (pictured), chief lending officer at Nottingham Building Society.
“As lenders, we can’t ignore the concerns brokers are voicing, especially the need for greater innovation — particularly when it comes to first-time buyers with non-traditional income streams — as well as calls for a more efficient mortgage process. It is only by continuing to collaborate with brokers and the industry, we can enhance our offering, helping borrowers to achieve their homeownership goals.”
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