The Growth Series

Attracting first-time buyers

Originally published 22/04/21

First-time buyers make up a significant proportion of all home sales each year.

But tapping into that market isn’t always easy, especially during difficult times when buyer needs and wants are rapidly changing. 

Knowing and understanding your target audience is key to success and it’s no different with first-time buyers. 

To really get in touch with them, you need to understand what they are looking for, what challenges and barriers to entry they are facing, and - crucially - how you can help.

What first-time buyers are looking for

Many factors will influence people’s buying decisions. According to research by Barratt Homes, location is the most important factor for 87 per cent of first-time buyers.

Meanwhile, 77 per cent said the size of the house influenced their buying decision, while having a large garden was a priority for nearly one in three.

Another consideration will be how long they plan to stay in their first property for.

Only half of first-time buyers said they plan on staying in their first home for more than a year. 

However, the reality is often quite different, with 71 per cent saying they ended up staying in their first home for four years or more.

Interestingly, nearly one in four first-time buyers said they found their ideal property the first time around.

Challenges and barriers for first-time buyers

While the economic landscape has changed in recent years, deposits and affordability remain the key challenges for first-time buyers.

As a result, many are turning to options such as shared ownership and crowd-funded deposits, as well as the so-called Bank of Mum and Dad. In fact, the proportion of first-time buyers receiving help from friends and family for a deposit reached 37 per cent in 2022-23, up from 27% a year earlier. 

But affordability is a more difficult challenge for first-time buyers to overcome, as regulatory stress testing requirements, though important, can make it harder for some to find a mortgage.

A proportion of these potential buyers are paying more in rents than they would in mortgage repayments, but are unable to obtain lending due to these stress tests. Joint borrower sole proprietor mortgages could help to support those with affordability challenges.

Learn more: Podcast #99 - Intergenerational Lending

How brokers can appeal to first-time buyers

Knowing the specific needs and challenges faced by first-time buyers is key to attracting them as clients.

You can then showcase your understanding and outline how you can help by creating and sharing relevant content.

Highlighting the value of advice by demonstrating the areas in which a broker can help is so important, as while brokers might be aware of the full range of potential solutions, many consumers won’t be.

Additionally, providing content that helps first-time buyers get ‘mortgage ready’ can be invaluable. When putting this content together, consider the following:

  • Steps to improve credit score
  • Different deposit options
  • Explaining the mortgage journey
  • Identifying vulnerable buyers and exploring how brokers can help
  • Enable family to be involved in discussions for support
  • Showcase other ways you can assist with the process (eg. with solicitors, conveyancers, insurance or protection)
  • Remind buyers that you can support them throughout their mortgage lifetime, not just this first purchase

It’s also important to consider how much personal contact first-time buyers are looking for compared to automated services.

Using this information, you can begin to better understand and attract first-time buyers.
Keep in mind the challenges they face, what they’re looking for in a home, and what you can do as a broker to help and support them.

Learn more: Your Customer's First Mortgage


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