Taking the first step on the property ladder, or going solo when it comes to employment, are two milestone moments in a person’s life.
But for borrowers who fall into both categories it may feel increasingly difficult to get a mortgage.
And this was never more true than in the current climate. The challenges brought on by the cost-of-living crisis, record inflation and higher interest rates have made sure of it.
Investing in new technology will speed up applications
Although there are signs that the market may be stabilising, with the Bank of England keeping its base rate the same in September, for the first time in months, for many borrowers buying a first home may feel further away — at least without major sacrifices and lifestyle changes.
Indeed, research carried out by Yorkshire Building Society (of which Accord is part), released recently, shows that many borrowers are putting off key life milestones, such as having children and getting married, in favour of saving up to get on the property ladder.
It’s a fantastic opportunity to pull together
This is why the need for advice and support — from both brokers and lenders — continues to be so significant, especially for underserved groups.
Unusual times for lenders
It’s been a very different year so far for a lot of lenders too, with increasing interest rates, fluctuating swap rates and the introduction of the Mortgage Charter. There’s no doubt we’ve all had to adapt and evolve to better support brokers and their clients in the current climate — with lessons we learned during the pandemic.
Increasing the skillset of our underwriting and BDM teams will ensure that brokers and their clients can access the support they need
For us, this has meant being able to really evolve our propositions to suit the new landscape we find ourselves in and — most importantly — to address the needs of the borrowers within it.
This kind of nimbleness is even more important when it comes to underserved groups.
Changes we’ve made this year include adding more options to the types of acceptable income we’ll consider, such as different kinds of benefit; introducing a market-leading cashback product for first-time buyers; and — most recently — amending our contractor criteria to enable us to consider applications from a wider range of borrowers, thus helping brokers to support the increasing number of clients falling into this category.
Research shows that many borrowers are putting off key life milestones in favour of saving up to get on the property ladder
But there is much more work to be done here, with opportunities in the market for new products and propositions in this space. It’s up to lenders to react to this.
Borrowers with more complex needs
And there’s even more to this picture. We all know that, nowadays, fewer cases are simple — for all types of borrower — and, as lenders, we need to be prepared for this.
This is something we can facilitate by investing in and keeping on top of new technology to help brokers submit applications as efficiently as possible; and by increasing the skillset of our underwriting and business development manager teams to ensure that brokers and their clients can access the support they need, whenever and wherever they need it.
Nimbleness is even more important when it comes to underserved groups
As the market, hopefully, continues to stabilise, demand for advice from first-time buyers, the self-employed and other forms of underserved borrowers is likely to remain strong.
It’s a fantastic opportunity for the industry to pull together to develop new ways to help them — and we’ll be up for the challenge.
Jeremy Duncombe is managing director of Accord Mortgages
This article featured in the October 2023 edition of MS.
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