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A clean credit score, proof of affordability and broker soft skills key to FTB success – Geddes
London-based broker, Rachel Geddes, MD, of Global Mortgage Management, said brokers are leaning on longer advice lead-in times of 12 to 18 months, soft skills and working far harder than ever before at getting first-time buyer clients on the housing ladder.
In the second part of a video series in association with Accord Mortgages, Geddes said: “It’s taking FTBs a lot longer to actually get on the ladder. We’re working with them for maybe 12 to 18 months before they buy their property. So, its staying in contact with them, keeping confidence high in what they’re doing and preparing them because they often need a bigger deposit.”
Geddes added: “It’s changed for every age group. They’re paying more in rent, they’re getting married older, they’re having children and buying houses older. You’re seeing a mix of people having to buy together, so, friends, siblings. These things have really changed, so it’s working with them non-stop just to keep them confident in what they’re doing and when they’re going to do it.”
Due to the smaller deposit, credit scores have to be clean and first-time buyers have to know they’ll need to document all additional ancillary income, including commissions or bonuses, said Geddes.
“We need proof of it to be able to utilize affordability,” she said.
Richard Merrett, director of strategy for Simplybiz said technology adoption was helping brokers explore wider affordability options and said lenders like Accord who adopted a common sense approach to lending often applied a little more flexibility to policy and have become more popular with the intermediary market.
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He added: “A lot of brokers have started to challenge customers more. So if you were a first-time buyer, buying a home, asking do you need that large PCP car loan, for example?”
Jeremy Duncombe, managing director at Accord Mortgages, said research from the lender showed people are concerned house ownership might become an elite privilege as we become a nation of renters over the next five years.
“Rising rents mean that drive to get on the housing ladder means people are making quite different decisions, whether its getting married later or not at all, buying later, or staying at home with parents. But while people are having to make these hard decisions, they are still choosing to go for that mortgage, so there are some really encouraging signs there,” said Duncombe.
See the first video segment on buy to let in this four-part series here.
Note: Since the recording of this video, Richard Merrett will return to Alexander Hall to take on a new role as its managing director in January.