"As lenders, we can't ignore the concerns brokers are voicing, especially the need for greater innovation - particularly when it comes to first-time buyers with non-traditional income streams - as well as calls for a more efficient mortgage process."
- Praven Subbramoney - Nottingham Building Society
Mortgage brokers have seen an increase in first-time buyer activity over the past year but say lenders must adapt to evolving financial and lifestyle trends to better support new homeowners, according to the latest findings from Nottingham Building Society.
82% of brokers said that they have experienced an uptick in FTB activity over the past year but noted significant changes in the finances and lifestyles of applicants, many of which are not being met by the current market.
For example, 31% said they had seen an increase in buyers with fluctuating incomes, while 23% have seen a rise in self-employed borrowers, highlighting the need for more flexibility from lenders around ‘non-traditional’ incomes.
The research also shows that there has been a marked increase in the number of FTBs needing financial support to secure a mortgage; a third (31%) said they had seen a rise in multi-generational purchasers pooling resources, while the same number (31%) said they had seen growth in the number of buyers utilising government schemes such as Help to Buy and Shared Ownership.
Brokers call for greater product flexibility and innovation
However, while brokers are seeing an increase in FTBs looking for more flexible ways to borrow, many report that the market needs to improve if it is going to meet these changing needs, with a third of brokers surveyed (31%) stressing the need of more innovative mortgage products to accommodate the different circumstances of modern borrowers.
Nottingham Building Society’s research also shows that 26% of brokers want to see a more flexible approach to lending that ‘recognises the broad needs and circumstances of borrowers today’, with transparency regarding application decisions (29%) highlighted as a key area for improvement.
Brokers also say they want to see improvements in the actual process, particularly in terms of speed, with four in ten (41%) reporting that the mortgage application process is either no quicker than it was two years ago or has become even slower.
Some of the key areas that brokers want to see tackled by lenders include regular and timely updates regarding changes or additions to the product range (29%), a commitment to making the application process as pain-free and quick as possible (27%), and a willingness from lenders to embrace new innovations and technologies to improve the mortgage application process (24%).
"Brokers are telling us that first-time buyer activity is on the up, but that the financial – and lifestyle – needs of these buyers are evolving, which means the market must too," commented Praven Subbramoney, Chief Lending Officer at Nottingham Building Society, “As lenders we can't ignore the concerns brokers are voicing, especially the need for greater innovation - particularly when it comes to first-time buyers with non-traditional income streams - as well as calls for a more efficient mortgage process.
Praven concluded, “We are prioritising the adoption of innovative new technology to make the application experience smoother and faster for brokers. It is only by continuing to collaborate with brokers and the industry, we can enhance our offering, helping borrowers to achieve their homeownership goals.”
