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First-time buyers increasingly using ‘specialist’ mortgages, says Vida

by: Chris Menon
  • 04/09/2017
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First-time buyers increasingly using ‘specialist’ mortgages, says Vida
Data from specialist mortgage lender, Vida Homeloans appears to indicate that an increasing number of first time buyers (FTBs) are taking specialist lending products for their flexibility.

A third of Vida’s applicants have used gifted deposits from close relatives and two-thirds have been part of a maximum of four borrowers getting together to buy a property. Over a third of its applicants are also self-employed. Meanwhile, not all FTBs are maximising their loan to value (LTV), with the majority borrowing below the 85% maximum.

Since the company’s launch in October last year, a significant proportion (42%) of its residential purchase customers have been first-time buyers (FTBs). According to the company, this is in line with Council for Mortgage Lending (CML) data showing that the number of FTBs over the last 12 months has overtaken the number of home movers for the first time since 2006.  

The data from Vida Homeloans also shows it has loaned FTBs an average £171,000 per purchaser, over £35,000 more than the average loan amount quoted by the CML.

The company said market changes and regulatory updates mean it is more important than ever for advisers to explore all possibilities when speaking with their clients, especially FTBs, who may be overwhelmed by the complexity of the market. 

Louisa Sedgwick, director of sales-mortgages, Vida Homeloans, said: “The data we have gathered since last October shows that first-time buyers are taking advantage of the wide range of products and specialist options in the market currently, despite the near constant commentary suggesting buying your first home is becoming out of reach for some would-be FTBs. We have been amazed by the numbers of FTBs we have lent to already and we’re really proud to help them become homeowners.”

“Whilst this is encouraging news for those buyers who are able to get onto the ladder, more needs to be done to promote the affordability of home ownership to those who have so far felt unable to purchase their first property. Brokers play a crucial role in ensuring first-time buyers pursue home ownership and don’t get deterred at the first step, which can often be a knock-back from high-street banks. Brokers need to be considering the wide range of products or features on offer, allowing these budding home owners to become real FTBs.”

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