Advising the next generation of first-time buyers

December 2021

In this topical article with Best Advice, Jonathon Stinton, Head of Intermediaries, discusses the importance of modern communication with first-time buyers and shares tips as to how to engage with a technically minded generation.

Buying a first home is an exciting prospect for many borrowers. Yet, it's a journey that can also be daunting, with so much conflicting information out there and no obvious place to start looking for guidance.


Brokers, however, have always been a great source of information and advice for those new to home buying, and indeed for any mortgage borrower. However, a key challenge these intermediaries now face is how best to engage an increasingly digitally minded generation of first-time buyers, in order to guide them through the purchase process.


According to figures from UK Finance1, brokers currently hold an 85% market share for first-time buyer mortgage transactions by number. To ensure they maintain their current share, brokers need to engage future generations of homeowners, or we could see a significant reduction in their profit and market percentage over the coming years.


To put themselves in the best possible position to engage first-time buyer clients, help them find the right deal, and therefore build long-lasting relationships to ensure repeat business, there are a few steps brokers can take when reaching out to the next generation of buyers.


Engage them through channels they use


The next generation of first-time buyers is incredibly tech-savvy, growing up with smartphones and in the era of social media. As technology continues to advance alongside the ability to do almost anything online, it is now more vital than ever for intermediaries to keep in touch with their customers through the appropriate channels.


25-30-year-olds make up 31% of the UK's Instagram usage (statista). Using social media channels such as Instagram and Facebook to both educate and raise awareness about the homebuying process can be a great way to reach and engage younger generations.


Brokers must consider the types of content they produce in order to stay connected with first-time buyers. Videos, pictures and other digital media forms that can be consumed quickly are far more likely to engage these potential buyers than long wordy posts or more traditional forms of communication.


Providing valuable advice


With the ever-changing mortgage market, it's all too easy for first-time buyers to become overwhelmed when trying to find a product that best suits their individual needs. Brokers are well versed in staying up-to-date with the latest developments in the market, and keeping issues specifically affecting first-time buyers in mind can also help them to provide valuable advice to these customers.


For example, affordability is the primary issue facing "generation rent", with 87% of UK adults saying that the ability to get on the property ladder is their main housing concern. Furthermore, house prices are continually rising; according to the Office for National Statistics, the average property price for first-time buyers in 1992 was 2.6x the average recorded first-time buyer household income. In 2021 this figure stands at 4.7x.


With the green mortgage market growing, it will also be important for brokers to proactively discuss the sustainable products and propositions lenders offer. Nearly 60% of young people are very or extremely worried about climate change and are actively making more sustainable choices in all aspects of their lives. Understanding the main issues and concerns facing the next generation and providing tailored insight into products like green mortgages that could meet their needs is a great opportunity for brokers to demonstrate their value and a personalised service.


Stay in touch after completion


Many first-time buyers will have a limited knowledge of the entire home buying journey, and so intermediaries are in a great position to act as a trusted guide for these clients. But helping these borrowers to navigate the intricacies of the mortgage market shouldn't stop with this first engagement. Brokers may want to consider sending a gift to congratulate them on their first home and, most importantly, should ensure they keep in touch.


It's easy to assume that once first-time buyers have completed and signed the dotted line, they'll never look back. However, future opportunities including remortgaging and product transfers might worry first-time buyers as their mortgage begins to mature. The key is to be proactive and engage with these clients before it becomes their concern.


By getting to grips with new channels of communication and providing tailored mortgage advice over the long term, brokers can successfully position themselves for the next generation of first-time buyers so they remain a key part of their mortgage journey for the years to come.


1UK Finance, New residential lending sold direct and via intermediaries

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