Speaking to this publication, Jen Lloyd (pictured), mortgage head of product and propositions at Skipton Building Society, said that first-time buyers were a “real area of focus” and that was clear in the product development in the last years.
“We’re keen to help more people actually access the property ladder and that links into our founding purpose.”
“In terms of the home finance business, that’s very much focused on definitely helping people to get onto the ladder and helping people who are maybe underserved. That’s very much focus point number one.”
Another priority was using data and insights from the biggest estate agency to “shape the propositions that we bring to the market”.
She continued: “We’ve got an eye on the sales market but also the rental market. So, it’s leveraging that as a group and making sure that that informs the products and propositions that our team bring to market.”
Lloyd said that the lender and the wider industry needed to challenge themselves in terms of solutions to get more people into homeownership.
“There are solutions that once worked for people but that don’t work so well anymore and we need to have a little more of a flexible approach,” she added.
Lloyd illustrated this by noting that the house price to income ratio was 3.7x in 2000 and currently stood at 7.7x. However, most lenders offer 4.5x LTI meaning some could struggle to afford a home.
She added that first-time buyers should not have to rely on family wealth to achieve their property aspirations, pointing to the possible reform of lifetime ISAs, so more first-time buyers could understand and leverage the product.
Lloyd noted housing supply needed urgent work, adding that there was a backlog of around four million homes so injecting more supply into the market was crucial.
From ‘resentful’ renters to first-time buyers
Lloyd said that regarding its track record mortgage, which launched in March last year and goes up to 100 per cent loan to value and includes rental history, Skipton was “really happy with how it’s been received”.
She continued that it was “keeping a watching brief on rising rents and mortgage pricing”, noting that rents had gone up by around 10 per cent but mortgage rates were going own so the product could “fit for even more resentful renters”.
Lloyd said that there were probably around four million people in the UK that were ‘resentful’ renters, and whilst there was “always a time and a place for renting” and it could work “absolutely brilliantly” for some people” that was still a “huge number of people who don’t want to rent”.
The lender also rebranded its joint borrower sole proprietor (JBSP) offering to income booster to improve understanding, which Lloyd said has “gone down super well”.
She noted: “What’s interesting is a lot of brokers do know what JBSP is, but their clients don’t. It’s just being mindful of how we support intermediaries and them having those conversations with their customers. By calling things what they are and making sure that we’re kind of removing as much jargon as we can, that’s having a positive effect.
“I think we can all challenge ourselves around the rest of the industry as there’s still plenty of jargon and we can do more to strip that back. It’s unnecessary a lot of the time.”
First-time buyer market is ‘really resilient’
Looking at trends for the coming year, Lloyd said while the purchase market was down year-on-year in 2023,the first-time buyer market is holding up.
Figures from Skipton Group released earlier this week showed that first-time buyers made up around 28 per cent of the housing market in 2023, which is up from 16 per cent in 2015.
Lloyd said: “I think that shows that, as a segment, the people that are not yet on the ladder remain committed to getting that first step on ladder, and what we’re seeing in the data from estate agents is that they are more happy to change their expectations when it comes to the kind of property they can afford.
“The first-time buyer market is really resilient and I expect to see that continuing next year.”
She noted that some volatility around pricing would continue, noting that it was unlikely that mortgage rates beginning with a one or a two would be returning to the market.
“It has been encouraging to see them coming down from the peaks that they were at a few months ago, but I certainly don’t expect them to be going below where they once were,” Lloyd said.
She continued that sub-five per cent rates coming out will “psychologically be…a trigger” for many to start or restart their homebuying plans.
Technology and green agenda priorities for Skipton
Lloyd said that another priority was “making sure that we’re still delivering really streamlined experiences for brokers and for customers”.
She continued: “It is a much more complex market so how can we do more to cut through that for intermediaries and their customers.”
Lloyd added that the broker platform has “room for improvement” and it was “definitely” on the lender’s mind to look at in the coming year to see how the firm could “streamline the process even more to make it as easy as possible.”
She noted that it was also looking at smaller actions that borrowers could take to improve energy efficiency and wanted to encourage brokers to be “having the right conversations about living in a greener way”.
Lloyd explained: “I think what I’m really mindful of is at this time it is a big ask, when finances are under pressure, the thought of taking out more additional borrowing to put solar panels on your house or to install an air source heat pump may be not that that isn’t a fit for everybody.
“But what are the small steps that we could be advocating for as a lender and what are the things that we can equip brokers with so that when they are talking to their clients, it’s not necessarily all or nothing, but about what other small things that be done to help move the dial when it comes to greener living.”
