For the fourth day of our First-Time Buyer-focused week, Adam Davitt, Senior Sales Manager at online mortgage broker Mojo Mortgages, speaks to the biggest challenges advisors and brokers are facing when placing first-time buyer cases today.
“While the headlines often focus on the stabilisation of interest rates, we in the industry see firsthand how the “new normal” has created new layers of complexity for first-time buyers (FTBs). In fact, the role of the mortgage intermediary has never been more critical.
The challenge is no longer about simply finding the best rate; it’s about partnering with clients to navigate a complex labyrinth of lender criteria and shifting socioeconomic realities.”
According to Davitt and the team at Mojo Mortgages, there are four primary hurdles currently defining the FTB landscape as we head into 2026:
1. The Affordability Ceiling
“Despite a more predictable rate environment, affordability remains the ultimate roadblock. We are seeing a persistent “gap” between what a client earns and what a lender will provide.
High property prices, when run through the machinery of modern stress testing, mean that even clients with “clean” credit and impressive salaries are sometimes falling short. The math simply doesn’t track for many; when you combine current utility costs and the general cost of living with stringent debt-to-income ratios, the borrowing power of a single professional, or even a dual-income couple, is being squeezed to its limit.”
2. The “Rent Trap” and the Deposit Barrier
“While 95% Loan-to-Value (LTV) products are widely available, the jump to that first 5% is getting higher. We are witnessing the “Rent Trap” in real-time: as private rents continue to consume a record percentage of take-home pay, the ability to accumulate a deposit is stifled.
For those without access to the ‘Bank of Family,’ the mountain is incredibly steep. Brokers are increasingly finding themselves in the role of long-term planners, helping clients visualise a multi-year savings path while navigating the limited pool of lenders willing to accept higher LTV risks in a volatile market.”
3. The Modern Workforce vs. Traditional Underwriting
“The “standard” PAYE applicant is becoming rarer among first-time buyers. We are seeing a surge in complex income structures, for example:
- The Multi-Hyphenates: Clients with a primary job supplemented by side hustles or gig-economy work.
- Variable Pay: High reliance on bonuses, commission, or “shift-heavy” roles.
- New Self-Employment: Talented individuals who transitioned to contracting during the post-pandemic shift but lack the three-year history some lenders still crave.
“The challenge for the adviser is the massive inconsistency in how these incomes are “haircut” (percentage a lender deducts from non-guaranteed income, like bonuses or foreign currency, before they include it in their affordability calculation) by different banks. One lender might take 100% of a regular bonus; another might take 50% or ignore it entirely.”
4. The Nuances of Credit Health
“In a tight market, lender’s credit appetite” becomes incredibly granular. A “thin” credit file can be just as damaging as a missed payment from three years ago. We are spending more time on “credit hygiene” than ever before.
For advisers, the value-add here is signposting. We need to be proactive in advising FTBs on the basics that trip many up:
- Voters Roll: Ensuring they are registered at their current address.
- Administrative Diligence: Ensuring all financial documents and IDs are registered to the same current address to avoid fraud triggers.
- Active Management: Encouraging the use of a credit card for small, cleared monthly spends to “thicken” a thin profile.
Summary
“The bottom line is that the ‘easy’ cases are disappearing. Today’s market requires a broker who is part-analyst, part-strategist, and part-educator. Placing a first-time buyer case in 2026 isn’t about the product; it’s about the preparation.”
For more advice on how to navigate the mortgage market today as a first-time buyer, visit https://mojomortgages.com/first-time-buyer-mortgages
