Over a third (39 per cent) of younger first time buyers are primarily relying on advice from friends and family rather than a broker for support on the homebuying process, research from Coventry for intermediaries has revealed.
The research, which was conducted in partnership with the Centre for Economics and Business Research, showed that 33 per cent of FTBs aged 18 to 24 said they relied on brokers specifically for guidance and information when buying their first time.
This is despite 90 per cent of FTBs from the same age bracket using a broker during the homebuying process.
Jonathan Stinton, head of intermediary relationships at Coventry for intermediaries, said: “Our research shows there is an advice gap between younger first time buyers, who need extra support, and who they are relying on to provide this level of support.
“Brokers should be the go-to source of advice in the mortgage industry and can guide new buyers through the current market and the different stages of buying a home.
“For younger people who are finding it more challenging in this economic climate, brokers are in the perfect position to help these borrowers find a mortgage deal that could enable them to take their first step onto the ladder.”
Opportunity for brokers
Coventry suggested that this research highlights an “opportunity” for brokers to step in and support these younger clients earlier in the process.
This comes as 40 per cent of all FTBs surveyed said that they needed more help and information on applying for a mortgage.
A further 36 per cent also want more guidance on the exchange of contracts and the costs of buying a home.
To plug this information gap, Coventry suggested that FTBs should engage with brokers at the earliest opportunity to ensure they’re fully aware of the mortgage process and all the key costs involved.
Stinton explained: “For brokers, these buyers also represent an excellent opportunity to build up a new base of future clients by providing them with tailored advice.
“By positioning themselves as market experts, brokers could turn today’s first time buyers into repeat business for the years to come.”
Pressures
The research pointed out that FTBs have been the subject to cost-of-living pressures and high inflation, with 33 per cent of those aged 18-34 saying they found it difficult to secure a mortgage.
Coventry therefore advised that brokers could play a critical role in helping these individuals to navigate what is a challenging market and find the best possible mortgage deals.
However, the research also showed that FTBs who used a broker during their homebuying journey benefitted from the guidance they provided, with 96 per cent saying brokers played an important role in their experience as a first time buyer.
By acting as a helpful source of guidance in the homebuying process, there is an opportunity for brokers to demonstrate their value to new buyers and increase their chance of securing repeat business, Coventry explained.
tom.dunstan@ft.com
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