Data released by Aldermore highlights the fact that many first-time buyers do not understand mortgage terminology.
The term that causes the most amount of confusion – with 61 per cent of respondents reporting a lack of understanding – is ‘first dibs for homes to Londoners’.
This is followed by ‘starter home initiative’ at 59 per cent, ‘Help to Buy equity loan’ at 52 per cent, ‘lifetime Isa’ at 47 per cent, ‘Help to Buy Isa’ at 36 per cent and ‘shared ownership’ at 35 per cent.
This implies, says Aldermore, that many FTBs could be missing out on the various benefits and pathways that these schemes provide for those wishing to enter the property market.
The lender also outlines that 57 per cent of FTBs who had purchased a property in the last three years found the process “confusing”.
The most challenging part of the process is raising a deposit, which 10 per cent of those asked replied with, closely followed by comprehending legal jargon and the length of the buying process, which took 9 per cent of the responses each.
Furthermore, of FTBs who have purchased a property in the last three years, 33 per cent saw a sale fail, costing an average of £1,545, with this rising to £1,814 for those who bought a property in the last six months. Over half – 52 per cent – of FTBs stated that they spent more money than intended.
Aldermore director of mortgages Damian Thompson (pictured) comments: “Buying a first home is a challenging process and it is being made harder as future buyers clearly do not feel they are being informed enough about the options open to them.
“Collectively as an industry, we need to do a better job with educating prospective buyers to ensure they are knowledgeable of the products and initiatives available, so they are not missing out.”