Mortgage advisers propose reforms to aid first-time homebuyers

White paper details solutions to help lower barriers to homeownership

Mortgage advisers propose reforms to aid first-time homebuyers

A group of mortgage advisers has proposed a series of sweeping reforms and innovations designed to make it easier for first-time buyers to get on to the property ladder.

In a new white paper, the Industry Panel for Financial Advice (IPFA) has called on lenders, housebuilders, mortgage professionals, and regulators to collaborate and find new ways to help first-time buyers obtain mortgages.

IPFA is a new body comprising advisory firms in the mortgage and protection market, all of which work in close partnership with Sesame Bankhall Group (SBG).

The white paper, which includes contributions from lenders Nationwide and Kensington, seeks to address the three main barriers facing today’s first-time buyers: raising a deposit, affordability pressures, and a lack of suitable homes to buy.

The paper follows confirmation of a planned government review of the mortgage market to help first time-buyers, who are arguably finding it more difficult than ever to get on to the ladder due to a combination of different factors, such as the end of Help to Buy, rapidly rising house prices, the spiralling cost-of-living, and economic uncertainty.

IPFA has urged mortgage and property sector stakeholders to work together to solve the problem and proposed five solutions to help lower barriers to homeownership for first-time buyers.

These solutions are: protecting and increasing the number of homes being built for first-time buyers; launching an industry-wide campaign to raise awareness of Help to Buy alternatives; creating intergenerational mortgages; considering new and innovative approaches to high LTV lending; and exploring the idea of ‘low-start’ mortgages, which could combine capital and interest-only borrowing to help tackle affordability barriers.

“Getting on to the housing ladder has always been difficult, but this generation of first-time buyers is facing perhaps the toughest set of challenges yet,” Alex Beavis, proposition director of mortgages and later life at Sesame Bankhall Group, said.

“For a lot of young people out there, the idea of one day owning their own home has become a pipe dream. We need to work together to create positive change.”

Stephanie Charman, head of strategic relationships at Sesame Bankhall Group, added that “we need fresh thinking” as the problems first-time buyers face are both complicated and varied.

“I am so excited by the proposals put forward by the Industry Panel for Financial Advice, which I genuinely believe would make an enormous difference if they were to be adopted,” Charman said.

“However, to make that a reality, we need the buy-in from all stakeholders, including those from the advice industry, mortgage lenders, the government, and regulators – and fast. This is simply too big a problem to tackle by any one party alone.”