Why first-time buyer anxiety is rising – and how brokers can help

First-time buyers are entering the market more anxious and more confused than ever before, and the problem is not a lack of information but an overwhelming excess of it.

Katherine Stagg (pictured top), managing director of Stagg Mortgage Services, described the market as cooling noticeably in August, with enquiries from first-time buyers dropping off as uncertainty took hold. Those who do come through the door, she said, arrive cautious rather than confident.

"At the minute they're all a little bit on the fence, if I'm honest," Stagg told Mortgage Introducer. "Everybody's cautious, asking loads of questions regarding rates and stuff."

What is driving first-time buyer anxiety?

The anxiety Stagg describes is not simply about affordability. Many of the first-time buyers she works with arrive having already absorbed conflicting guidance from multiple sources – family members, online affordability calculators, TikTok videos and AI tools – before they ever sit down with a broker. The result is confusion rather than clarity.

"You're having conflicting information from your family and friends," she said. "They're telling you to do 25 years. They're telling you to do A, B, and C. Then affordability calculators say different things. And then you get a TikTok sensation saying do this or do that. And then you get ChatGPT saying, actually, you want to ask this question and ask that."

Stagg said she had recently seen clients arrive with questions drawn directly from TikTok and noted that concern about AI-generated mortgage misinformation had been raised within the industry, with technology-focused firms working to challenge inaccurate information circulating through AI platforms. Those concerns reflect broader industry debate about misinformation and the broker's role in correcting it.

The generational dimension adds another layer. One of the most common misconceptions Stagg encounters comes not from social media but from clients' parents. Older relatives, she said, often advise first-time buyers to stick to a 25-year mortgage term – advice that can be financially damaging for buyers already stretching their affordability.

"The father-in-law turned around straight away and went, oh, you don't want a 40-year mortgage, stick to 25. I thought, but you can't say that because 25 years could be another £1,000 on the monthly amount that they haven't got. That's the reason why they do it up to 40 years, to stretch the affordability so it is affordable and they can do other things."

What brokers can do

For Stagg, the broker's role goes well beyond product selection. At Stagg Mortgage Services, the firm accompanies clients through every stage of the process – from solicitors' paperwork to post-completion – and makes a deliberate effort to create an environment where no question feels too basic. The firm also produces first-time buyer guides to break down the process in accessible terms.

"We make sure from start to finish we're with them with the solicitor's paperwork, with everything else," she said. "And also give them a bit of a safe space so that any question is not silly or stupid."

Stagg also highlighted a widening regional divide in the first-time buyer experience. Outside London, where property prices can run three or four times higher than in cities such as Sheffield, purchasing at a younger age remains far more achievable. The affordability gap means client conversations in northern regions can look entirely different to those in the capital – a divide that shapes both broker approach and buyer expectation.

Closing the knowledge gap early

Stagg believes the solution to first-time buyer anxiety lies partly upstream. Stagg Mortgage Services has begun visiting schools and colleges to introduce young people to the basics of mortgages and financial planning before they reach the point of buying. The firm also runs monthly sessions at a local community centre. This kind of broker-led financial education reflects growing calls for earlier financial literacy support.

The government's existing schemes – including the Lifetime ISA, with its 25% bonus on savings open to eligible age groups, and the First Homes scheme offering discounts on new-build properties – are useful in principle, Stagg said, but poorly communicated. The Lifetime ISA's £450,000 property price cap renders it largely irrelevant for buyers in London, and the resale restrictions attached to First Homes can create complications at remortgage.

Her prescription for what would make the biggest difference is straightforward: clarity.

"I call it first-time buyer anxiety, because if you have clarity and if you're telling them the clear steps, the clear numbers, clear expectations, you've got to break it down so they know what they're going to be paying for two years, but also over two years and what's the difference."