On Friday 27 February the Chancellor of the Exchequer, Rt Hon Rachel Reeves MP, met with senior leaders from 13 building societies from across the UK in Leeds to discuss how mutual lenders are helping first-time buyers turn homeownership from aspiration into reality.
She heard how building societies are supporting people with smaller deposits, complex incomes and non-traditional work patters, and lent her support to their campaign for aspiring homebuyers to think again about what might be possible.
Research from the Building Societies Association (BSA) shows that many aspiring first-time buyers could be closer to owning their own home than they think. Two-thirds (67%) of those trying to get a foot on the property ladder said they would be able to buy a home sooner than they thought when shown mortgages available from building societies that require no or low deposits, highlighting a clear gap between perception and reality.
The findings show that almost half (47%) of people who want to buy their own home have never spoken to a lender or mortgage broker to check what options are available to them. In Yorkshire, this rises to almost six in ten (59%), and even those in the region who have, more than half (54%) have not done so in the last year.
During her visit, the Chancellor met three first-time buyers who were pleased to have recently bought their own home, overcoming the challenges of getting on the property ladder.
At the roundtable, building societies, including Nationwide, Leeds, Yorkshire and Skipton discussed with the Chancellor, Rachel Reeves, the issues facing today’s first-time buyers, and how mutual lenders are developing practical solutions to help more people onto the property ladder.
Building societies now provide 35% of all first-time buyer lending. Nearly half (46%) of this lending goes to borrowers under 30, almost a quarter (23%) supports buyers with deposits of less than 5%, and one-in-ten (10%) helps first-time buyers aged over 451.
Building societies have long been champions of first-time buyers and continue to innovate in response to modern challenges such as high house prices, non-traditional career paths and varied income patterns. Options available across the sector include very low or no deposit mortgages, flexible or extended repayment terms and shared ownership lending. A more personal approach to underwriting can also help borrowers whose personal circumstances may not fit more rigid and automated systems used by other lenders.
Chancellor of Exchequer, Rachel Reeves said:
"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. I welcome the Building Societies Association’s work to help people understand the options available to them.”
Sarah Harrison, Chief Executive of the Building Societies Association said:
“We welcome the Chancellor’s support for our “think again” campaign and the opportunity to discuss with her how building societies are helping first-time-buyers across the country – and how with her support we can do even more.
“Too many people assume homeownership is out of reach without ever checking what is available to them. Building societies were set up to help ordinary working people buy their own homes, and that hasn’t changed. Whether it’s a smaller deposit, flexible ways of looking at income and affordability, or support for people whose circumstances aren’t straightforward, there are more options onto the property ladder than many first-time buyers realise.
“It’s worth anyone thinking about buying their own home to have a chat with a building society or mortgage broker, it could be the difference between thinking ‘maybe one day’ to ‘why not now’.”
Kat Kitson, Head of Member Experience at Beverley Building Society said:
"We applaud the Chancellor’s support of building societies, which is an important move towards helping more people take that first step onto the property ladder.
“Here at the Beverley we specialise in providing flexible, common-sense lending solutions for people who are underserved by the traditional mortgage market. We provide mortgages of up to 95% Loan-to-Value for first time buyers and with our Family Assist option, a family member can support a loved one by placing a charge against their own property, so no cash deposit is required and the buyer can access the full purchase price.”
With manual underwriting rather than an automated approach, we’re committed to making homeownership accessible for as many people as possible.
