Chancellor Rachel Reeves met with senior leaders from 13 building societies in Leeds on Friday to discuss measures aimed at assisting first-time buyers entering the property market.
The meeting, which included representatives from Nationwide, Coventry, Leeds, Yorkshire, and Skipton building societies, focused on challenges facing prospective homeowners, including smaller deposits, complex income verification, and non-traditional employment patterns.
Market data
Building societies currently provide 35% of all first-time buyer lending in the UK. Of this lending, 46% goes to borrowers under 30, whilst 23% supports buyers with deposits of less than 5%. Additionally, 10% of building society first-time buyer lending assists purchasers aged over 45.
Research from the Building Societies Association (BSA) found that two-thirds of surveyed prospective buyers indicated they could purchase a home sooner than anticipated when presented with mortgage options requiring low or no deposits.
The data also revealed that 47% of prospective buyers have never consulted a lender or mortgage broker, with this figure rising to 59% in Yorkshire. Among those who have sought advice, more than half (54%) have not done so within the past year.
Government position
Reeves stated: “For too long, homeownership has felt out of reach for young people. We’re changing that by building 1.5 million new homes this Parliament and reforming mortgage rules so more first-time buyers can get the keys to their first home.”
The government has committed to reviewing mortgage regulations as part of its housing strategy.
Sector offerings
Building societies have introduced various products to address barriers to homeownership, including mortgages with minimal or no deposit requirements, flexible repayment terms, shared ownership lending, and manual underwriting for applicants with non-standard circumstances.
Leeds Building Society has reduced the minimum household income requirement for its Income Plus mortgages to £30,000, according to interim chief executive Annette Barnes.
Sarah Harrison, chief executive of the Building Societies Association, said: “Too many people assume homeownership is out of reach without ever checking what is available to them.”
Outlook
The BSA’s campaign aims to increase awareness among potential first-time buyers about available mortgage options. The organisation suggests prospective buyers consult with building societies or mortgage brokers to assess their eligibility before assuming homeownership is unattainable.
