Speaking at the British New Homes Mortgage Senate, hosted by Mortgage Solutions, panellists pointed to questions around government support, consumer confidence, housing costs and market inefficiencies as key factors shaping activity.
Questions remain over new government support
The discussion came against the backdrop of the government’s proposed Your First Home scheme, with lenders awaiting further details on how it will operate in practice.
Gemma Clark, national housing development manager at Lloyds Banking Group (LBG), said the industry broadly welcomed initiatives designed to support homeownership.
“The devil’s in the detail,” she said, highlighting questions around price caps, regional variations and the practical challenges of implementing the scheme.
She added: “The challenge is the 2.5%. How does that affect systems and processes?”
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Clark agreed that any judgement regarding the success of the Your First Home Scheme should focus on long-term borrower outcomes and sustainability, rather than transaction volumes alone.
Alongside the proposed scheme, Clark said discounted homeownership programmes remained a “really important part” of LBG’s business, underscoring the need for multiple routes into homeownership rather than relying on a single solution.
Affordability no longer the only barrier
While lenders have increased borrowing capacity in recent years, panellists suggested that higher affordability does not automatically translate into greater demand.
Clark said lenders were seeing a shift in customer behaviour, with prospective buyers questioning whether they wanted to commit to higher monthly repayments even when they could technically borrow more.
“What we’re seeing now is the challenge around actually can they afford it? So we might lend to you, but do you want to pay that much?”, she said.
She added that subdued house price growth had reduced the urgency many buyers once felt to enter the market quickly.
She continued: “The desire to buy quickly isn’t probably there right now.”
Andrew Calder, strategic partnerships and propositions manager at Accord Mortgages, said many consumers were also ruling themselves out before seeking advice, often overestimating the impact of issues such as adverse credit on their mortgage options.
He said: “One of the things that stood out was actually the barrier, which people still have to find themselves before they get into the advice space.
“The ability to borrow is there. Whether someone chooses to is the difference.”
Broadening access to homeownership
Rob Barnard, intermediary relationship director at Pepper Money, argued that affordability pressures were increasingly affecting borrowers beyond the traditional specialist lending market.
He said many customers who fall outside mainstream lending criteria are not necessarily facing severe financial difficulties, but may simply not meet the parameters of a high street credit score.
“An adverse credit customer can just be someone who has failed a high street credit score,” he said.
Barnard added that lenders should focus on expanding sustainable access to homeownership rather than creating additional barriers.
He continued: “Responsible lending should not be finding more ways to say no. It should be finding more ways to say, sustainably, yes.”
The panel also discussed the pressures facing existing homeowners who are looking to move while managing higher mortgage repayments, childcare costs and stamp duty bills.
Participants suggested there was scope for further product innovation, including temporary affordability solutions and greater use of family support and intergenerational wealth to help borrowers navigate changing financial circumstances.
Clark said there was still “room for innovation”, although any new propositions would need to be balanced against appropriate risk controls.
Read more coverage from this year’s British New Homes Mortgage Senate
- British New Homes Mortgage Senate: New-build premiums are real, but benefits must be explained
- British New Homes Mortgage Senate: Brokers and developers should take longer-term view of buyer journeys
- British New Homes Mortgage Senate: The economics of housebuilding have changed since Help to Buy
- British New Homes Mortgage Senate: Uncertainty around Future Homes Standard costs and valuations
