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Halifax reports dramatic fall in first time buyers but are there enough incentives to encourage them to buy? Experts share their views

by | Sep 27, 2023

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The number of first-time buyers fell 22% between January and August this year, compared to the same period in 2022, according to the latest Halifax First-Time Buyer Review which was released earlier today. The report certainly makes for stark reading, but is unlikely to come as a surprise to mortgage and property professionals.

Interestingly however, we’ve asked our brand new Editorial Panel of Mortgage and Property professionals to share their thoughts on the data with us. However, we’ve gone a step further and also asked the panel if they believe that there are enough incentives to encourage first time buyers into the property market at present. Their views make for interesting reading!

Their reactions and thoughts can be seen below:

Robert Winfield, Managing Director of Chartwell Funding, commented:

“I don’t think lenders need to offer cashbacks or waive fees to attract first time buyers, it has to be criteria driven. If you look at Nationwide’s helping hand approach, this enhances what first time buyers can borrow and is exactly what they need. Furthermore, Skipton have their Track Record mortgage which is great if you are a renter with no deposit, but the big driver whether to buy or rent is the payments.


My idea would be to allow first time buyers a maximum of 25% on interest only for the first five years. This would help bring the monthly payments down and make buying an attractive proposition. Yes this sounds like a pseudo help to buy scenario, but lenders can manage this themselves inhouse and at the end of the 5 years we can work with the clients to convert some/all of this element on to a repayment basis.

It’s worth remembering though that all first time buyers are not the same and it will take a multitude of lenders to tweak their criteria to get the bottom of the property ladder busy again.”

Tony Joannou, MD, Money Sage Ltd, commented:


“So the figures are in, the damage of increasing rates by the Bank of England is now apparent all though for those of us who are actually working on the front line this is nothing new. First time buyers can drive the housing market both for resales and new build but what incentive is there to risk a property purchase now when in six months time, all the media is telling you it will be worth less. Lenders can incentivise as much as they want, but alone they cannot fix a broken market. Although housebuilders will be using this to push government to bring back some kind of first time buyer scheme such as the Help to Buy scheme, we do not need more badly thought out schemes that do more damage and distort the market. What we need is a reform of the stamp duty scheme (scrapping it would be ideal), the Bank of England to ease off the stupidity pedal and then for everything to be left alone just for a change. Let market forces do what they do best and the entire housing market will settle down and just as it has done before and will do again, drive the UK economy and allow everyone a chance to own their own home and prosper.”

Nick Green, Mortgage Broker at Alternative Estates, commented:

“FTB mortgage ranges are generally very good versus other deals as the gap between the LTVs has narrowed, the main issue is the perception of interest rates and the hope they may come back down is making FTB and other buyers hesitant. The current rates are likely to be the new normal albeit maybe a slight reduction on current deals. There was a uplift in the housing market in January post the ‘mini budget’ which I put down to the Christmas dinner effect i.e. FTBs speaking to parents and families about these new high mortgage deals over the Christmas break and the parents explaining they bought at 15% rates, so then they sort of excepted these are the new rates so started buying in the new year. Then we had several more rate rises! 


The lenders starting to advertise the rate reductions and having an appetite to lend again will encourage more buyers, along with some guidance from the BOE that this should be the end of the rate rises.”

Ian Angus-Felton, Senior Mortgage and Insurance Broker & Technical Manager at Greenshoots Financial, commented:

“The 22% fall in first time buyers doesn’t come as any surprise. To the housing market, First Time Buyers are the equivalent of a starter motor in your car’s engine. It’s always present but if the car won’t start, the car won’t move or power anything else.


“There aren’t nearly enough incentives and support schemes in place to help First Time Buyers. A variety of schemes have been put in place over the years but what have they really achieved? Sure, they have helped some people but the issue remains, first time buyers are finding it really hard to be able to afford their first homes. And as Industry we just aren’t doing enough.

“Innovation is needed and one potential way forward is the development of Blended Mortgages. Rather than getting funding from each other, Mortgage Lenders could engage Pension Funds and Investment Banks to pool funding. This could lead to much greater flexibility for a Lender to balance their appetite for risk with the unique needs of a borrower. This could lead to much higher loan to income ratios and smaller, if any, deposit requirements. Lifetime or Generational Mortgages are also a potential radical solution that we would like to see more exploration of by the industry.”

Lewis Prager, Managing Director at Leeds Money, commented:


“I will start by saying I am not surprised at the 22% drop in First Time Buyers in the data by Halifax. We have to reflect on how it is possible to save a 10% deposit on a hypothetical £100,000 house , so we are talking about saving £10,000 whilst paying current inflated rents due to landlord raising rental prices as too their mortgages have increased ( no way am i blaming landlords ) , this is all before we can even start to assess affordability. The deposit saving can also be a challenge for quite a number of first time buyers who are only just starting off their careers and most of the time dont have the benefit of bank of mum and dad like others may have. 

Generational wealth needs to be reviewed & I think isn’t been passed on efficiently. House prices need a correction, not a plumet. New Build inflated prices needs addressing. Lenders need to review current payable rent more too for affordability like Skipton launched. Cash back incentives to take the burden of legal costs and removal of lender product fee’s will all aid in the First Time Buyer purchases.”

Wendy Docherty, Director – Property Finance of SPF, stated: “First time buyers are suffering due to high interest rates and low lending levels based on lenders affordability requirements, whilst rates remain at their current levels it’s going to continue to be difficult for them to get onto the property ladder.   There are plenty of incentives available such as ‘helping hand’, JBSP, cash back and most will accept longer term’s up to 40 years.  Lenders need to review their affordability criteria to more consider the current level of rents FTB’s are paying and base it around this instead of income multiples.”


James W Melhuish DipPFS EFA, Financial Wellbeing Specialist at Eppione, stated:

“From the perspective of first time buyers, the issue is and always has been, that this transaction is complicated and fraught with jargon at every turn. Yes there needs to be more products and incentives but ultimately the education around the transaction of buying a house needs to improve. Workshops and seminars in schools, colleges and universities will be a good start. 

A radical but practical step could be that the continuous professional development, that regulated individuals need to undertake every year, should incorporate an element of pro bono/volunteer work in the community teaching people about subjects such as property purchasing.”


Roger Phillips, Senior Partner, at MTGE UK, stated:

“Higher mortgage rates, expensive rent, cost of living, ability to save and a housing market that is going to drop by an obscene amount are factors that would put many a first-time buyer off, reading this you would question why buy and so we need to do our part and dig deep.  

As an industry we need to do more, its not just beholden on a lender, we should be mindful of lender responsibilities over affordability, be aware the government has no money so the return of help to buy remains substituted and other factors.  


Sometimes we need to return to the past, a FTB in rental property has a payment record, this is not factored in yet its proof and not a statistic, it was done in the past and perhaps should be reconsidered, its encouraging to see Skipton and Credit Ladder, working but surely more can be done. The credit agencies have a place to play here, where rental payment history is used towards buyer affordability.  

Finally we have become a word of push button broking where experience and knowledge no longer counts and could be detrimental, we no longer problem solve as an industry but take orders.”       


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