Recent research highlights a lack of awareness among first-time buyers regarding higher loan-to-value (LTV) mortgage options in the UK.
- A significant 64% of potential first-time buyers are unaware of these financial opportunities, impacting their approach to homeownership.
- Approximately one-third of prospective buyers are unclear about the required deposit size, hindering their purchasing plans.
- The study reveals misconceptions about deposit needs, with many believing a 20% deposit is essential.
- Experts stress the role of brokers in educating customers on alternative homeownership paths.
Recent findings from the Pepper Money Specialist Lending Study indicate a concerning trend among first-time buyers, with 64% unaware of the high LTV mortgage options available to them. This lack of awareness limits their understanding of potential pathways to homeownership, often leading to unnecessary financial hurdles.
According to the study, a staggering 32% of potential buyers are uncertain about the deposit size necessary for purchasing a home. This uncertainty is compounded by another 32% who mistakenly believe they need a deposit of 20% or more. Such misconceptions can delay or even derail their plans to enter the housing market.
The desire for homeownership remains strong, with 69% of non-homeowners expressing the aspiration to own a property in the future. However, financial constraints loom large, as 22% of respondents anticipate a wait of over five years to achieve financial readiness. Disturbingly, 36% fear they might never be able to afford a home.
Ryan Brailsford of Pepper Money underscores the importance of correcting these misconceptions. He stresses that many potential homeowners have prematurely dismissed their chances due to misconceptions about deposit requirements. Brailsford highlights various schemes like Shared Ownership and Right to Buy, which support buyers with smaller deposits.
Zara Bray from Legal & General echoes the sentiment, pointing out the critical role brokers play in guiding potential homeowners. She emphasises the need for increased public education about available options and calls for industry innovation to broaden access to first-time buyer opportunities. By aligning lender products with consumer needs, brokers can significantly elevate buyer chances.
Addressing these misconceptions by enhancing awareness and understanding of mortgage options can significantly empower first-time buyers in their homeownership journey.
