Today’s first-time buyers are changing the conversation on mortgage lending

Those are two very different things, and it’s an important distinction to make. Responsible lending has never been about forcing every application to fit the same mould. It’s about making informed decisions based on the circumstances sitting in front of you.

The FCA itself has been careful to make that point. Around 99% of mortgages taken out since mortgage standards were tightened in 2014 are not in arrears, demonstrating the resilience of the market.

The consultation wasn’t about stepping away from responsible lending. Instead, it asked whether today’s rules give lenders enough flexibility to support creditworthy borrowers whose circumstances may not fit traditional lending models, while maintaining those same high standards.

Where mutuals can make a difference

Mutual lenders are particularly well placed to support that approach. Our focus has always been on understanding individual circumstances rather than simply processing transactions, and I don’t think that approach has ever been more relevant than it is today.

It doesn’t mean saying yes more often, but it does mean taking the time to understand whether a case genuinely works instead of assuming it doesn’t because it falls outside what used to be considered conventional.

That relationship-led approach also benefits brokers. When brokers know they’re working with a lender that’s prepared to understand the context behind an application, conversations become more productive and customers are better served.

Ultimately, that creates greater clarity on all sides because everyone understands why decisions are being made.

Keeping pace with the market

We’ll continue to see plenty of discussion around affordability, flexibility and how lenders assess modern borrowers. Those conversations are healthy because they encourage all of us to question whether our products, criteria and processes still reflect the market we’re serving.

Standing still isn’t really an option when customer circumstances continue to change.

Ultimately, I don’t think today’s first-time buyers are asking lenders to rewrite the rulebook. They’re simply reflecting the reality of modern life, where careers can be less linear, financial circumstances are more varied and the route into home ownership often looks different from the one previous generations took.

Our responsibility as lenders is to keep listening, continue learning from brokers and make sure our thinking keeps pace with the customers we’re here to support.

That’s why I see the FCA’s work as much more than a discussion about regulation. It’s an opportunity for the industry to reflect on how the market has changed and make sure we’re responding in the right way.

If we continue listening to brokers and never lose sight of the individual behind every application, I think we’ll be in a strong position to support the next generation of homeowners.

Paul Purewal is head of intermediary relations at Dudley Building Society