Converting First Time Buyers

The market is picking up - so arm yourself with the new first-time buyer trends to convert these opportunities

The latest RICS survey has positive news for mortgage advisers. The net balance for new buyer enquiries has reached 10% in June, and the sales balance is positive for the first time in 10 months.

And there’s been a 14% increase in Unbiased first-time buyer enquiries compared to this time last year. They make up around 40% of mortgage enquiries, and to convert them it pays to understand the changing trends of who they are.


The new first-time buyers

A lot has changed in the past few years. In 2005-06 two thirds of first-time buyers were couple households. Now, according to government figures, three quarters of them are.

They’re older than they’ve ever been, and HSBC shows that over half already have a family.

The market has also adapted. SBC shows that since January 2018 the average mortgage term for FTBs has increased to 27 years and 8 months – a significant three-and-a-half-year rise.

And the average LTV for these buyers has also jumped from 72% in January 2018 to 81% now.

So first-time buyers are older, more likely to have a family to support, taking on a larger amount of debt, and taking this commitment on for longer than ever before.


Remove the risks

Getting a first mortgage was once a largely exciting prospect, but these new trends show it’s now more stressful than ever. So your first port of call is to tackle this stress, and tackle it quickly.

Provide reassurance, lay out a roadmap, and make sure they’ve got everything they need for the first meeting. This isn’t just about making things run smoother – it instils them with a sense of control.

If you’ve matched with them through Unbiased, sell this point to them. Say that Unbiased is full of great advisers, and out of all of them you’re the exact right fit.

Show in the first meeting that because of this you already have products in mind, but don’t start offering them too soon. To convert these clients, taking the stress away is top priority – jumping the gun with complex products will only add more.

On average, half of those submitting Unbiased mortgage enquiries want advice over the phone. But for first time buyers, phone advice is least popular - with face to face and online being joint favourites.

So make sure you’ve got your advice methods set up to capture this, and to make the process as easy for them as possible.

And finally, don’t forget to make it clear that remortgaging is vital for best deal. If you’ve nailed the points above the first-time around, they should remain loyal for years to come.

About the author
Oliver Broadhurst
Oliver Broadhurst
Oliver has been writing professionally in the financial services space for over five years, focusing on topics ranging from customer experience to industry regulation. He’s consulted with organisations such as UK Finance and the FCA to produce business articles, industry reports, and white papers, while providing insight as a member of panels including The Opening Banking Implementation Entity’s Consumer Group.

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