National Accounts Lead, Skipton Building Society
06 November 2023
3 min read
First time buyers face myriad challenges in the current climate. Research recently undertaken by Skipton Building Society shows that on average it takes 7.9 years to save the deposit for a first home, 12.8 years in London. Combined with the recent increases of mortgage rates and knock-on challenges with affordability, the cost-of-living crisis and the end of Help to Buy, there’s a lot for someone buying for the first time to tackle. Some first time buyers have family members or friends who are able to contribute towards their deposit but, for many there is no such support. Lender innovation in this area will be key.
Another area in which we can all help first time buyers is with their understanding of the mortgage market and terminology. Consumer understanding is one of the four outcomes of the recently introduced Consumer Duty requirements and firms have been spending much time this year ensuring that their communications meet those requirements. We work in an industry that uses a lot of technical terms and it can be difficult to be aware that what is an everyday word to you, may not be fully understood by a customer. A recent Skipton survey of 1,000 first time buyers found that 40% were confused by mortgage terms such as stamp duty, negative equity and conveyancing, 60% of them are worried that their lack of understanding is slowing down the process and 52% are worried about missing out on a better deal because they don’t understand what is available to them. Nearly eight in 10 (79 per cent) of all first time buyers surveyed agree the homebuying process would run a lot smoother if everyone just spoke in layman's terms.
We all have a part to play in demystifying the home buying journey and the language used. Brokers can play a vital role holding their first time buyers’ hands through the process, ensuring customers fully understand the meaning of the terminology used, that they are not missing out on the right product and that they have a mortgage product that meets their needs and circumstances. I for one am keen to work together, to share our knowledge and to help first time buyers take that first all important step.
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