Jonathan Evans on why first-time buyers and the products built for them are never one-size-fits-all
The biggest challenge facing first-time buyers in the UK isn’t a lack of desire. From those still living with their parents to those renting longer than they planned, people across the country aspire to homeownership. Many are doing their best to turn that desire into four walls all of their own but keep stumbling out of the gate. What stands between ambition and access is nearly as enduring as the dream it thwarts: affordability.
Jonathan Evans, Senior National Account Lead at Skipton Building Society, sees this struggle play out every day. And while affordability is often treated as a single obstacle, he’s quick to point out that it rarely presents the same way twice.
“Some customers can afford monthly payments but struggle to get the deposit, then you've got the complete opposite,” Evans says. “First-time buyers aren’t just one group; different customers face different barriers. Solutions need to reflect individual circumstances.”
Where there’s a will, there’s a product
The context in which the affordability challenges crop up is important, because it hasn’t done first-time buyers any favours. Purchase mortgage approvals fell from 66,000 in April to 56,200 in May as the Iran conflict drove rate volatility, pushing the average fixed rate from 4% to 5% in the space of weeks.
Add to that picture a new government settled at Number 10 and a budget due October 28, and there’s no shortage of reasons for people’s confidence to waver on how - or if - they’ll ever get a property. Though he’s first to admit there’s a lot happening, Evans is equally quick to point out that demand from first-time buyers has not followed the headlines.
“House prices are high compared to income and saving a deposit while paying rent is difficult,” he says. “But there’s realistic and responsible optimism in the market and reasons to be positive.”
Lenders are more willing to innovate where they can without waiting for regulatory change, with some of the impetus provided by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). Any clarification from the regulator is helpful, but Evans stresses that no one effort on its own is a silver bullet: the lending limits the FCA touched on, for example, are only one lever in a complex machine.
The FCA’s CP26/18 Mortgage Rule Review also proposes welcome changes. The stand-out for Evans is increased coverage of variable and irregular income.
“Gone are the days of a comfortable salary arriving the same day every month,” Evans says, pointing to the rise of zero-hours contractors, supply teachers, bank nurses, and people with side hustles or multiple income streams.
“There are a lot of creditworthy buyers out there who don’t fit traditional salary models. Lenders need better tools to assess these incomes and improve access without weakening standards.”
The encouraging thing is that the industry as a whole is mobilising - and that certainly helps first-time buyers. Skipton, he adds, is “definitely one of the pioneers” in that effort.
Built for the buyer in front of you
At Skipton, the focus is on developing a suite of targeted solutions, each one built to address a specific affordability barrier and remain open to further refinement.
Track Record, the lender’s no-deposit mortgage, is one of its most popular. Since its launch three years ago, it’s helped over 2,500 buyers and generated roughly £186 million in applications to the half-year point.
The product has also evolved considerably since it came to market — from a like-for-like rent cap, to 120%, to its current ceiling of 150% - driven by direct feedback from brokers and customers through initiatives like the Skipton Listens broker forum.
With Track Record, raising the threshold made sense because Skipton kept hearing how some renters were unfairly restricted for sensible saving behaviour, Evans explains.
“A very savvy aspiring first-time buyer might deliberately choose a cheaper rental property, or one in a less affluent area, to allow them headroom to save for the deposit. But that act of saving worked against them, because it stopped them borrowing enough to buy the property they could actually afford.”
Since the change, the two biggest drivers of affordability declines on Track Record cases are true shortfalls and loan-to-income (LTI) caps - not the rent ceiling that previously held many buyers back.
Solutions for buyers whose barrier is income rather than deposit remain an important part of Skipton’s offering. Skipton’s research into first-time buyer affordability highlights the scale of this challenge, with many buyers requiring additional income support to meet affordability requirements and others relying on family assistance to get onto the property ladder. Income Booster helps address this issue through a joint borrower sole proprietor proposition, enabling buyers to boost their borrowing potential using the income of a family member or friend, without making them legal owners of the property.
More recently, the LTI Booster was added to the range, targeting a third distinct group: those who can meet monthly payments but are constrained by the standard income multiple. By extending LTI to 5.5x, it opens a route to purchase for buyers who have the income to service the debt but have been hitting a ceiling that the standard lending framework couldn’t accommodate.
Delayed Start rounds out the suite, fitting in alongside the core products to provide extra flexibility. The product allows buyers to defer their first payment by up to three months (although interest does accrue from day one), easing pressure during what Evans describes as “a particularly expensive period of their life” that may include overlapping rent, moving expenses, new furniture, and repairs.
In all, no single product is meant to carry the full weight of the affordability challenge.
“The challenge isn’t deciding whether deposit or income is the biggest barrier, it comes down to different buyers facing different obstacles,” Evans says. “We as a lender are trying to address those obstacles responsibly.”
‘A clear, strategic desire’ to help
Around 92 per cent of Skipton’s lending is placed through mortgage brokers, and while brokers are largely across the options available, many of their clients are not. Closing that knowledge gap is as much a part of Skipton’s mission as the products themselves.
Evans’ advice to brokers is not to assume every first-time buyer fits the traditional mould or that they know what’s available to them. They should spend time understanding the individual barrier - deposit, borrowing power, affordability, cash flow during the move - and consider the full range of options.
“A lot of customers believe they need a deposit to buy a house, when in fact they don’t,” Evans says, urging brokers to use their connections: speak to letting and estate agents, host local events, and “get creative about how to get what lenders are doing out there to your customers.”
“It opens a wider market for the flexibility and innovation lenders are introducing. Brokers are the difference between a customer believing homeownership is impossible and finding a viable way.”
Today’s buyers face different challenges than previous generations. Meeting them requires everyone at the table, from brokers and lenders to government and policymakers.
“We’ve got a clear, strategic desire to help first-time buyers and it's not about lowering standards,” Evans says. “It’s about recognising that people earn differently, people rent differently, people save differently - and the route to homeownership is different for everyone.”
Jonathan Evans
Senior National Accounts Lead
Subject to eligibility and lending criteria.
For Intermediary Use Only.
This article was produced in partnership with Skipton Building Society
