The realities of a modern borrower – Cleary

They offer users mobile payments, access to investment accounts, savings accounts, mortgage advice and energy switching all at the tap of the app.

They’ll sweep up extra pennies on expenditure and deposit them into a savings account without you even noticing that you’ve started a savings habit.

They’ve driven large numbers of customers who previously banked solely with one provider to open new accounts that effectively function as a place for discretionary spending.

And offerings such as Zipcar have understood that not everyone, particularly not younger people, wants to buy and own a car; they still want to drive, but would rather enjoy flexible access to a car as and when they need it than take on the financial responsibility of fixed costs.

Renting for flexibility

The same argument is applied to younger people renting for longer. In some ways, and for some people, I buy it.

Renting as a social choice, offering often better-quality and larger accommodation in more convenient locations which can be handed back after a year makes a lot of sense for many people. Particularly when their employment is flexible and or/liable to move location.

But I think the majority of younger people in this country still aspire to own their own homes. Property remains one of those assets that, given time, has appreciated in value fairly reliably.

There is also the psychological and emotional need that most people have for the stability of a roof over their heads that no landlord can unsettle.

Avoid complacency

This is why we chose to support the government’s Help to Buy scheme three years ago and it’s why we have recently broadened our service to those buying in Scotland, as well as those who took their initial loan five years ago and are now needing to remortgage.

Part of our role as a lender in this ever-evolving economy is to support first-time buyers who decide they do want to get a step onto the property ladder.

This scheme has done this, with government statistics showing that of the almost half a million completions made using one or more of the Help to Buy schemes since 2013, nearly 90 per cent have been by first-time buyers.

But it would be complacent simply to sign up to offer this scheme and ignore the changes that our society is going through.

Realities of a modern borrower

How first-time buyers save, what they spend their money on and how they live before they make that first jump into homeownership is changing rapidly – and yet many lenders rely on old-fashioned precepts of what a good mortgage borrower looks like.

We’re living in a world where customers are encouraged to embrace a culture of switching – our car insurance, energy supplier, TV and broadband, mobile phone service, even our house when we’re renters – and it means we have an increasing array of accounts to manage.

The result can often be late payments, especially where first-time buyers are concerned.

They’re more likely to have moved home frequently, running a much higher risk that some accounts will slip through the address change net.

This does not make them a bad lending prospect – it makes them a modern one, which is why we do not rule out borrowers who have suffered a blip in their credit history. It is often just that.

In a world that is so full of change, we need to be constantly reassessing how we look at borrowers.