Younger first-time buyers are smarter and better prepared, veteran broker says
Younger first-time buyers are more financially savvy than recent generations and are climbing on to the property ladder faster, despite a challenging economic environment, according to one experienced mortgage broker.
Mike Brown (pictured), director of Crystal Clear Financial Services, says most first-time buyers now have a sense that, if they want to buy their first home, there are going to have to be ‘negotiables’.
“‘Compromises’ sounds like you are not getting what you want, whereas negotiables are what you have to do to get what you want,” he said.
A ‘seismic change’ from previous generations
Brown, who founded Crystal Clear in 2009, said first-time buyers are still able to climb onto the housing ladder and achieve their goal of homeownership despite market conditions. They only need to approach their purchase with an open mind.
Brown said that from his experience as a broker, first-time buyers these days are more open to the fact that they may need to move out to another area, may need to commute a little more or may need to hold money back for renovations.
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He added that where first-time buyers are not getting what they want upfront tends to be the number of bedrooms, but in a nicer area. During the height of the pandemic, Brown said, it was more a question of not buying a flat without a garden, but he said that seems to have passed a little now and first-time buyers are more open to getting on the property ladder as a long-term plan.
“In terms of deposits for first-time buyers, in the last 10 years, there has been a seismic change from the generation before which was very much ‘spend, spend, spend.’ Now we are now seeing young adults being much more money-savvy and saving more of their income to provide a much better level of deposit towards a purchase,” he said.
Brokers provide a reality check for first-time buyers
Brown said he has seen a number of clients who have spent time on property portals identifying what they would like to buy and the associated costs.
“However, I would say that in a lot of cases, what first-time buyers think they can get in terms of mortgage capacity is usually more than what they can actually achieve, as they have jumped onto a calculator online that gives some straight-line figure on income multiples,” he said.
Brown said that a good adviser will understand which lenders are suitable for each customer on a case-by-case basis and how to use their income to best effect.
Have you seen the latest generation of first-time buyers able to access the housing market faster and from a stronger position than in the past? Let us know in the comments below.
