Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Half of First-Time Buyers Unaware of £40k Increase in Borrowing Power

Research from Mortgage Advice Bureau (MAB) has found that half of first-time buyers do not know they could potentially borrow £40,000 more due to recent changes in mortgage policy. The study, which surveyed 1,000 renters planning to buy their first home, revealed that 50% were unaware of their increased borrowing capacity compared to 12 months ago.

The research also highlighted that many first-time buyers are still basing their decisions on previous lending criteria. Saving for a deposit remains a significant barrier, with 27% of respondents identifying it as the main obstacle to purchasing a home. Additionally, 73% of those surveyed did not know that 5% deposit mortgages are currently available.

MAB found that aspiring homeowners typically save for around six years before deciding to buy. However, 47% said they would purchase immediately if mortgage repayments were similar to their current rent, indicating that monthly affordability continues to be a key factor in buyer confidence.

Separate findings from Iress, through its Financial Readiness Index, supported these results. The index showed that prospective buyers expect to purchase their first home at an average age of 38.7 years, despite the actual average first-time buyer age being as low as 33. The research also found that 29% of first-time buyers expect to buy after the age of 40, and only 16% are actively saving for a home.

For letting agents and inventory clerks, these findings suggest that many renters may be closer to homeownership than they realise, but a lack of awareness about current mortgage options and lending criteria could be delaying their move into the property market.