Half of FTBs unaware they could borrow up to £40,000 more – MAB
Half of those surveyed were unaware their borrowing power had increased, with some able to borrow £30,000 to £40,000 more than last year.
Many first-time buyers (FTBs) are spending years saving for a deposit but are still underestimating how much they could borrow, research from Mortgage Advice Bureau (MAB) found.
Its survey showed 50% did not know that borrowing power had improved in recent months.
Half of those surveyed were unaware their borrowing power had increased, with some able to borrow £30,000 to £40,000 more than last year.
Saving for a deposit was seen as the biggest barrier by 27%, and 73% did not know that 5% deposit mortgages are available.
Additionally, the research found 47% would consider buying immediately if mortgage repayments matched their current rent.
Rachel Geddes, strategic lender relationship director at MAB, said: “For many first time buyers, the biggest challenge isn’t just saving for a deposit – it’s knowing whether homeownership is actually within reach.
“What this research shows is that many aspiring buyers may still be making decisions based on outdated assumptions around their borrowing potential, as lenders continue to introduce greater flexibility into the market.
“While affordability pressures certainly remain, speaking to a mortgage adviser earlier in the process can help buyers better understand the options available to them, rather than ruling themselves out too soon.”
Amanda Bryden, head of Halifax intermediaries and Scottish Widows Bank, said: “With more low deposit options, new schemes, and greater flexibility in how lenders assess affordability, first time buyers have more opportunities to get onto the housing ladder than they did even 18 months ago.
“With so many options, it’s easy to underestimate what might be possible, but speaking to a mortgage adviser can bring clarity and confidence, helping you understand what you could achieve.
“So if you’re thinking about buying, I would say now is the time to have that conversation.”
Rachael Hunnisett, director of mortgage distribution at April Mortgages, said: “Aspiring homeowners are spending years saving, making sacrifices, doing everything right, and yet many are still misinformed about how close homeownership could be.
“The mortgage landscape has shifted significantly in the last 12 months alone.
“Affordability criteria has broadened, lender flexibility has improved, and higher LTV options, up to 100%, exist that many first time buyers simply don’t know about.”
Hunnisett added: “That knowledge gap is the difference between a distant dream and having the keys to your first home in your hands, as this research by MAB highlights.
“The biggest risk right now is buyers ruling themselves out before they’ve even explored their options, based on outdated assumptions.
“However, early advice from a mortgage adviser with access to a wide range of lenders can be life-changing.
“Advice and mortgage innovation have always been fundamental in supporting homeownership, but in a market moving this fast, it matters more than ever.”
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