It’s easy to get a little lost in the many layers attached to the mortgage market, so for the purpose of this particular piece let’s focus on one of the sectors in most need of attention – first-time buyers. This year was dominated by government schemes and initiatives to support the first-time buyer marketplace. Generally speaking, the early part of the year did see a healthy purchase market although it was evident that significant changes in the political and economic landscapes prompted a more cautious approach across the property market as the year progressed. The major recipient of this shift being the remortgage market.
Focusing on the first-time buyer arena, February saw the launch of the Help to Buy London equity scheme to complement the government’s 40% equity loan. The capital inevitably remains a huge challenge for growing numbers of fledgling buyers but it was also encouraging to see a more widespread focus via the re-launch of the Help to Buy Scotland scheme. There was also increased lender support to the shared ownership sector which is expected to broaden further with greater government commitment going forward into 2017.
Speaking from a Barclay’s perspective, 2016 saw a surge in the number of first-time buyer applications thanks to some competitive rates and features such as longer end-dates, fee-free and cash back products across loan-to-value (LTV) bands. Activity was particularly strong within the new-build sector and when looking forward to 2017 this is an area where we expect to see sustained levels of activity.
Issues surrounding deposits will still prove to be the largest hurdle for many first-time buyers in 2017. This underlines the importance attached to the development of innovative products which incorporate a range of viable lending solutions – including support from family members plus the provision of responsible incentives to help a variety of first-time buyers.
The next 12 months will see an even greater emphasis on communication and engagement. Working directly, and in conjunction with intermediary partners, across many different mediums will help better educate and address some of the lingering issues and concerns among the first-time buyer community. Similar to issues surrounding the availability and supply of affordable housing, there remain no quick fixes in solving the conundrum these borrowers face. Having said that, the first-time buyer sector will remain of primary importance for the government and many lenders throughout 2017.
Let’s hope that the next year will prove to be positive ones for this pivotal area of mortgage market. And that even closer relationships between lenders, distributors and intermediary partners are further cemented to help make this happen.