Despite available options, a significant portion of first-time buyers remains in the dark about higher LTV mortgage options, shows new research.
- The study reveals that nearly two-thirds of prospective buyers lack awareness of higher LTV options, impacting their homeownership plans.
- A third of respondents are unclear about the necessary deposit size, while another third mistakenly believe they need 20% or more.
- Saving for a deposit emerges as the primary obstacle for 32% of aspiring homeowners.
- A considerable number of people foresee a long wait or deem homeownership impossible.
A fresh study from Pepper Money brings to light a considerable gap in awareness among potential first-time buyers concerning higher loan-to-value (LTV) mortgage options. Nearly two-thirds of those surveyed are uninformed about these opportunities, which could facilitate an easier entry into the housing market. This lack of awareness significantly hinders many from pursuing homeownership, despite available avenues that may suit their financial situations.
The survey further reveals that 32% of respondents are uncertain about the deposit size needed to secure their first home. In an interesting parallel, another 32% mistakenly believe they require at least a 20% deposit. This miscalculation contributes to misconceptions about the feasibility of purchasing property, perpetuating a sense of discouragement among potential buyers.
A substantial 69% of those who do not currently own a home express a desire to do so in the future. However, saving for a deposit stands out as the foremost barrier, noted by 32% of participants. The perception of insurmountable financial hurdles likely stems from misunderstanding the real requirements and options available.
Among all surveyed, 22% believe they will need over five years to achieve a financial position that makes homeownership viable, while 36% anticipate they might never reach that stage. These statistics highlight a pressing need for better information dissemination regarding mortgage possibilities that might otherwise hasten their journey to owning a home.
Ryan Brailsford of Pepper Money pointed out the widespread misconceptions evident in the survey results. He stresses the importance of educating the public on realistic deposit requirements and available options, underscoring that many are much closer to purchasing a home than they realise. In line with this sentiment, Zara Bray from Legal & General emphasises the crucial role brokers play in guiding potential buyers through available products, suggesting that increased industry efforts could significantly elevate the opportunities for first-time buyers.
Informing potential buyers about realistic mortgage options could shorten their path to homeownership.
