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How can brokers add value for first time buyers in 2024? 

by | Feb 8, 2024

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Jonathan Stinton, Head of Intermediary Relationships at Coventry Building Society, highlights some of the key points from a recent Coventry report on the First Time Buyer Economy with tips on how brokers can ensure their client proposition is future friendly.

Those clients aspiring to become homeowners and get on the property ladder this year will have to navigate a complex economic landscape. Interest rates, which have seen a structural shift, are expected to remain at 5.25% until the second half of 2024, before gradually declining1. 

Coventry’s report on The First Time Buyer Economy has shown that mortgage lending is expected to increase by 16% in 2024, reaching £65.3 billion2. However, as we remain in a high rate environment with rising costs of living, affordability will continue to be a challenge for many borrowers. The role of the broker will continue to be essential in this climate, informing buyers of the often-missed costs of buying a home, in addition to the complexities of the mortgage market. 

Helping first time buyers early on 

First time buyers often have a fair understanding of property prices and what type of property they can afford. However, for those taking their first step onto the property ladder, the mortgage process can be daunting, with numerous legal and administrative hurdles to jump over before finally getting the keys to their new home. 

While brokers are in the best position to steer clients through the complexities of the mortgage market, our data shows that 44% of first time buyers turn to their family and friends for advice on the homebuying process3. Although relatives have valuable input, buyers also need the support of a reliable professional. 

Brokers must connect with first time buyers at the earliest opportunity. One way they can position themselves as a go-to source of support is by leveraging digital tools. While some brokers have started to use online marketing to appear more approachable, grasping the opportunity to engage with today’s first time buyers means taking full advantage of technology and social media. 

Whether it’s Instagram or TikTok, brokers need to think differently about how they can reach target audiences who prefer a more direct, simple and engaging approach. 

Hidden upfront costs are catching homebuyers out 

Coventry’s research shows that first time buyers spend an average of £8,300 on upfront costs related to buying a home, including legal fees, redecorating and renovation costs. By 2025, these buyers are predicted to spend a collective £3.1 billion in extra costs relating to home purchases4. 

However, the data also reveals that many first time buyers are unaware of these fees, with 53% unaware of mortgage product charges, nearly half (49%) unaware of valuation fees and almost a quarter (23%) unaware of legal fees5. 

Helping first time buyers understand these costs can ensure brokers add the maximum value to conversations with these clients, further establishing their position as a trusted source of advice. 

Moreover, brokers that engage buyers early in their journey will lay the foundations for a longer-term relationship. In today’s economic environment, such lasting connections will be key for brokers hoping to retain and gain further business through word of mouth recommendations. 

Retaining clients for life 

Building trust is vital for brokers, positioning them as lifelong contacts for homeowners. First time buyers, who might go through multiple future house moves and remortgages, are a key demographic. By guiding buyers through the homebuying journey and fostering relationships, brokers become go-to advisers for future mortgage and financial transactions. Where brokers are playing that role, our data suggests that first time buyers are recognising the value they add; 96% of those who used a broker said they were important in the homebuying journey6. 

The valuable insights brokers offer, combined with a personalised approach and focus on creating long-lasting relationships, not only ensure client satisfaction but also pave the way for repeat business in the years to come.

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