First-time buyers have become more active in the mortgage market in the last year, brokers have said, but lending must become more flexible to adapt, research from a mutual found.
A survey carried out by Nottingham Building Society suggested 82% of mortgage brokers said they were seeing more demand from first-time buyers than last year.
However, they said lenders needed to be more flexible regarding their circumstances and ‘non-traditional’ income.
This was reflected in the 31% of brokers who said more first-time buyers had fluctuating income, while 23% reported an increase in self-employed clients.
The survey also highlighted a rise in first-time buyers who needed financial support to get a mortgage, as 31% of brokers said there were more clients with multi-generational family members putting their money together and a separate 31% said there was an increase in buyers using homeownership schemes.
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More flexibility, speed and innovation
Brokers said the mortgage market needed to adapt to first-time buyer needs, with 31% saying there should be more innovative mortgage products to suit different circumstances.
Some 26% said they wanted to see lenders take a flexible approach to lending that acknowledged the circumstances of today’s borrowers, and 29% called for greater transparency around application decisions.
Some 41% also said the mortgage application needed to be sped up, as it had slowed down in recent years, while 29% of brokers wanted to see regular and timely updates to product changes.
Lenders committing to making the application process faster and pain-free was requested by 27% of brokers, while 24% wanted lenders to embrace innovations and technologies to improve the process.
Praven Subbramoney, chief lending officer at Nottingham Building Society, said: “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.
“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.”
She added: “We are prioritising the adoption of innovative new technology to make the application experience smoother and faster for brokers. It is only by continuing to collaborate with brokers and the industry [that] we can enhance our offering, helping borrowers to achieve their homeownership goals.”
