My Opinion: Market can’t afford to be inflexible


Lenders should be far more flexible over affordability; a one-size-fits-all approach is no help to first-time buyers

While the Brexit vote and the summer holiday period had a restraining effect on the housing market, this was felt mainly in the London regions. Nevertheless, due to the very competitive mortgage market and increased lending availability, volumes have held fairly steady.

We have seen a healthy rise in the volume of first-time buyer mortgages in particular; it is good that an increasing number of people are able to get on the property ladder.

This surge may be due to greater mortgage availability, and the low interest rates have clearly helped too.

Scheme of things

Lenders continue to launch schemes and initiatives, which have improved opportunities for first-time buyers significantly. For example, Barclays has recently revamped its Springboard range, offering up to 100 per cent LTV.

Government schemes too have provided assistance, such as Help to Buy.

Nevertheless, it remains expensive for first-timers to purchase a property, particularly when they factor in costs such as stamp duty and a deposit.

With this in mind, it is imperative lenders continue to offer innovative products and come up with new ideas for affordability calculations.

For example, if a first-time buyer has a sustained record of paying rent at a higher level than the potential mortgage cost, why should this fact not be used as part of the overall risk profile assessment and affordability calculation? Surely they are demonstrating both the ability and discipline to pay.

Some have predicted that more properties could become readily available for first-timers thanks to the recent changes to the buy-to-let market, which have rendered such investments less attractive than before. However, I do not believe there will be a huge reduction in buy-to-let business – because there is still no better investment than in bricks and mortar.

Bespoke service

Meanwhile, at Just Mortgages we are expanding our new-homes operation, offering a bespoke service to developers, which is gathering momentum. Developer activity is very positive and our proposition will help purchasers meet the needs of this type of property transaction.

We are also continuing to focus on our client servicing strategy, to ensure we communicate regularly with all our clients while making them aware of the options for future remortgage opportunities.

Such low interest rates have opened this avenue for customers on standard variable rates too. For many, now is the right time to secure their next mortgage deal.

There needs to be innovative thinking around mortgage options to make them even more attractive, particularly for first-time buyers. A one-size-fits-all approach is no longer sufficient.

Antony Lark is managing director at Just Mortgages