Most FTBs value intermediaries, lender suggests
For first-time buyers, mortgages can be a minefield – and no time more so, arguably, than in the current market, where house prices and product interest rates are high, and confidence of getting on to the property ladder is low.
And it’s against this backdrop that mortgage brokers have the potential to become super heroes in their own right. While a voluminous cape and tight leggings might not be the best look, the wealth of expertise and calm, considered guidance advisers bring to the novice property owner’s home-buying journey, cannot be overestimated.
Certainly, research from Coventry Building Society suggests that 96% of first-time buyers (FTBs) who have used a broker believe they were important in the homebuying process. With the lender’s data further indicating that the total value of FTB mortgage lending is projected to see 16% growth in 2024, reaching £65.3 billion, and a further increase to £71 billion in 2025, intermediaries could find themselves very much in demand.
“It is undeniable that brokers play a crucial role in ensuring that their clients achieve the best possible outcomes,” said Jonathan Stinton (pictured), Coventry’s head of intermediary relationships, who began his own career as a broker in the early 2000s, spending six years in mortgages, investments, and pensions, before joining the building society 16 years ago, as a business development manager.
“My relationship with brokers and the wider community is always my top priority,” he added. “A broker’s expert advice is invaluable, helping clients navigate market complexities and avoid misinformation. For the industry to stay on track, brokers should focus on continually learning and staying updated on the latest industry trends, schemes and regulations affecting new borrowers.”
Why brokers need to listen to clients
Stinton referred to a number of different product innovations in the market which are aimed at supporting first-time buyers. Understanding if these products are suitable for specific clients will be vital.
“Listening to clients’ needs and concerns will also help brokers to tailor solutions effectively,” he commented. “Brokers should be at the forefront of educating clients. Our team of experts support brokers by giving the guidance they need to provide tailored advice that meets the needs of their residential and buy-to-let clients.”
Further research from the lender has found that 91% of homeowners believe sustainability and energy efficiency are important. Stinton pointed to evidence from the Institution of Engineering and Technology that UK’s housing stock remains far less insulated than properties across Europe – intermediaries should embrace green initiatives, in his view.
“As we push for a net zero housing stock by 2050, brokers will be essential in bridging the knowledge gap around the supply of sustainable financial products available to help homeowners make these changes,” Stinton said, adding that this would help them meet growing environmental demands from consumers and appeal to eco-conscious clients.
Read more: IMLA wants review of regulatory barriers for first-time buyers
What is the impact of payment shock?
Many existing borrowers are experiencing payment shock, of course, as they transition from ultra-low rates and see their monthly repayments rise. While overall inflation is falling, world events and continuing price rises are still having an impact and interest rates remain higher than in the past, Stinton said.
“Despite the challenges this brings, brokers are in an excellent position to guide homeowners through the current mortgage landscape,” he noted. “Many borrowers will be turning to them for support and reassurance this year and beyond. My relationship with brokers and the wider community is always my top priority.”
Over the next year or so, further product innovation is expected in the market and further evolution of market regulation is anticipated.
“With that in mind, the need for the brokers will certainly not wain,” predicted Stinton. “The success of the mortgage market has relied on brokers’ adaptability. Despite consistent market challenges, their irrepressible skillset has helped the industry go from strength to strength. The broker community has proven to be incredibly resilient.”
