The lender / intermediary / client trifecta

As rising living costs are generating challenges for potential first-time buyers who may be struggling to control their disposable income and finding it impossible to add to any savings pots they may have accrued, what are the alternatives?

Firstly, let’s take a moment to evaluate the state of the current housing market beyond rising interest rates and spiralling fuel, energy and general monthly outgoings.

Contributing factors which are inevitably impacting homeownership aspirations for some and affordability levels for the masses.

Positive news did emerge from the latest RICS Residential Market Survey which highlighted that the number of new homes listed for sale has risen for the first time in twelve months.

In March, +8% of respondents reported a rise in the volume of fresh listings coming onto the sales market. New buyer enquiries also rose with +9% of respondents reporting a rise.

This was suggested to be the first time since the pandemic that the survey metrics for supply and demand have been so closely aligned.

In the ‘not so positive’ camp for potential homeowners, although the slight increase in the number of new listings becoming available is encouraging, it’s prudent to point out that the average number of properties on estate agents’ books remains close to historic lows.

In addition, the latest Rightmove house price index showed that the price of property coming to market hit a new record high for the third consecutive month.

Monthly prices rose by an average of 1.6% (+£5,537) in April and over the last three months by £19,082. This figure is said to be the largest three-month price increase recorded by Rightmove, with high buyer demand enabling sellers to ask and achieve ever higher prices.

With insufficient levels of property available on the market, sellers are able to find a buyer quicker than ever previously seen by Rightmove, and twice as quickly as in the same period in the more ‘normal’ market of 2019.

So, what is the answer for those potential buyers who may be struggling with rising prices?

There is no one-size-fits-all solutions to this question but an option could come in the form of shared ownership.

As such, it was interesting to read that lenders and housing associations speaking on panel sessions at Just Mortgages’ inaugural new build and affordable housing event suggested that brokers should prepare for an increase in shared ownership enquiries, especially with the Help to Buy scheme due to end next year.

Furthermore, the sessions also outlined that housing associations are expected to build more shared ownership houses, with increasing numbers of lenders predicted to enter the space.

However, panellists did warn that there needed to be more consumer awareness and understanding of shared ownership with brokers having a key role to play in educating borrowers.

This final point is a really important one as complexity and confusion does remain over product availability, criteria and future proofing borrowing requirements. It’s also important to realise the benefits of dealing with smaller, innovative, specialist lenders with strong regional knowledge as it requires a deeper understanding of affordability assessments to include the rental proportion of the property.

Shared ownership won’t be the right solution for everyone, but it does remain the only realistic means of buying for some would-be homeowners and this is where the benefits of a closely aligned lender/intermediary/client trifecta can have a real impact going forward.

Sue Pedley is business development manager at Hanley Economic Building Society

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