Of course, without a first time buyer, most housing chains can’t get going – all chains need a beginning as well as an end!
However, despite the case studies of beleaguered first time buyers so often considered by the media, the statistics can tell a slightly different story.
In 2006 and 2007 of all mortgages offered by mutuals, 18% of them were to first time buyers whose average age was just under 29 years old.
Since 2009, mutuals have, on average, provided 1 in 4 of their mortgage advances to first time buyers.
What is especially interesting is that the average age of the first time buyer remains 29 years old.
Despite the higher proportion of mortgages to first time buyers, the number of mortgages in total is smaller, reflecting what is now a much smaller market than before – but what has changed are the mortgage products targeted at first time buyers.
Mutuals have been quick to innovate and reflect the market changes in their product range. We now see products specifically designed so that first time buyers can receive help from the ‘Bank of Mum and Dad’, or a guarantor.
We see mutuals developing relationships with local builders in order to provide new homes for first time buyers in their local communities.
Mutuals are leading the way in lending on shared ownership properties; helping to provide affordable homes for those who can afford to own their own property, but maybe do not have a large enough deposit to go it alone.
In order to help this sector, the BSA has set up the Housing Hub to ‘matchmake’ lenders and developers in the shared ownership market.
As the proverb goes, necessity is the mother of invention, and mutuals are innovating to help those who would not otherwise be able to buy their first home.
Paul Broadhead is head of mortgage policy at the BSA
