Getting first-time buyers through the front door is only half the battle

The Budget has come and gone, and there’s certainly been plenty for the mortgage industry to get its teeth into. The Government has put some serious money behind helping first-time buyers, and I think that’s something worth recognising.

I’m all for anything that gives people a better chance of owning a home. Saving for a deposit is difficult enough when you’re paying rent and trying to keep up with everyday living costs, so it’s encouraging to see the Government looking at different ways to make that first purchase more achievable.

But there’s something else I’d like to see us talking about a little more. While new schemes can make a difference, I wonder whether we’re doing enough to help prospective buyers understand the mortgage options that are already available to them.

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A positive step for first-time buyers

The Government’s new £4.7 billion Your First Home scheme is an interesting proposition, with plans to support around 70,000 households in England through a 20% equity loan and deposits starting from just 2.5%. That’s a significant reduction in the amount somebody might need to save, and I can understand why it’s attracted attention.

The five-year interest-free period on the Government’s equity loan could also provide some welcome breathing space. Of course, we’ll need to see how the scheme works in practice, particularly when it comes to making sure buyers understand their longer-term financial responsibilities.

There’s also the proposed First Time Buyer ISA, which is expected to launch in April 2029, allowing annual contributions of up to £4,000 alongside a 25% Government bonus towards a qualifying first-home purchase. The Lifetime ISA hasn’t quite delivered everything people hoped it would, so I think there’s a genuine opportunity to develop something that better reflects how people save for their first home.

Both announcements are encouraging, and additional support for first-time buyers is certainly something we welcome at Darlington. But I wouldn’t want the attention surrounding these new initiatives to distract from the help that’s already available.

How many people have already ruled themselves out?

I suspect there are quite a few people who would love to own a home but have already decided they won’t qualify for a mortgage. They’ve looked at their savings, considered their circumstances and concluded that buying simply isn’t going to happen for them.

And I think that’s a shame, because some of those people might be surprised if they actually spoke to a broker. The mortgage market has changed considerably, and there are lenders willing to consider applications that don’t necessarily fit the traditional mould.

Take somebody who’s self-employed or earning income from several sources. They might assume their circumstances will make getting a mortgage difficult, when a lender taking a more individual approach could be willing to consider their application.

Supporting first-time buyers has always been an important part of what we do at Darlington, and we’ve long believed in looking at the person behind the application rather than relying entirely on a standard set of criteria. People’s circumstances aren’t always straightforward, and taking the time to understand them can make a real difference.

And that’s where brokers have such an important role to play. They can help people understand what lenders are looking for and whether there might be a suitable option they hadn’t previously considered.

Awareness shouldn’t come at the expense of affordability

Now, responsible lending has to remain central to everything we do, particularly when household finances are still under pressure. A smaller deposit might help somebody buy sooner, but it doesn’t necessarily mean their monthly repayments will be manageable. Equally, having access to a wider range of mortgage products doesn’t remove the need for robust affordability assessments.

But there’s an important difference between somebody being unable to afford a mortgage and somebody simply assuming they won’t qualify. I’d like to see us do more to help prospective buyers understand that distinction before they rule themselves out altogether.

Let’s make the most of what’s available

I think the Government deserves credit for recognising that first-time buyers need more support, and I’ll be interested to see how these new measures work once they’re introduced. There’s clearly an appetite to help more people into home ownership, which is something the mortgage industry should get behind.

But I also think we have a responsibility to make sure people understand the support that exists today. We shouldn’t have prospective buyers sitting around waiting for the next Government scheme when there might already be a mortgage option worth exploring.

If these announcements encourage more people to pick up the phone and speak to a broker, then that’s a positive outcome in itself. Because while Government support is important, sometimes the most useful thing we can offer somebody is the opportunity to find out what’s actually possible.

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