41% of first-time buyers don’t understand mortgage options

41% of first-time buyers who bought in the last 2 years struggled to understand the range of mortgage options available to them

• Two fifths (40%) found it difficult to secure a mortgage suitable for their financial situation

• Of those who faced difficulties, 39% regretted not using a mortgage broker when buying their property

Understanding the best mortgage options available for their circumstances was identified as a key challenge experienced by recently successful first-time buyers (FTBs), as two fifths (40%) have said they had found it difficult to secure a favourable mortgage rate, research finds.

Moneybox, which supports the largest community of first-time buyers in the UK, recently undertook research amongst 500 recently successful FTBs across the UK to spotlight the challenges encountered on the journey to homeownership and crucially begin to move the conversation towards solutions that can enable the next generation of homeowners across the UK.

Interestingly, those who struggled to understand their mortgage options were also more likely to have regrets about their home-buying journey; 43% said they wished that they had spent more time researching the mortgage options available to them, while 39% regretted not using a suitable mortgage broker.

Many of today’s FTBs are facing some of the toughest conditions in over 70 years to get their foot on the property ladder. Economic uncertainty, volatile market conditions, soaring interest rates, and affordability concerns have left these buyers having to navigate an increasingly complex homebuying market.

Reflecting on their experiences and how the next generation of homeowners in the UK could be better supported, 37% believe that there needs to be greater financial support made available for first-time buyers – e.g. government support. 36% called for more guidance to help people find suitable mortgage options relative to their personal circumstances.

28% felt more needs to be done to help people find a suitable mortgage broker, while 27% identified that many would value guidance on finding a suitable solicitor and surveyor.

Felicity Holloway, Head of Mortgages at Moneybox, comments: “Buying a home is the biggest financial commitment most of us will make in life, so it’s understandable that so many first-time buyers are calling out for more guidance and support throughout their homebuying journey.

“Yet, our research shows that a surprising number of people are not using the services of a mortgage broker, and so are missing out on freely available expertise and guidance that could prove to be invaluable in helping them achieve the best outcomes possible. We also know firsthand that even among those who engage a broker, many wait until they’ve had an offer on a property accepted! It’s disappointing, but perhaps not surprising, to see that 8 in 10 of the recently successful home buyers we surveyed said that, in retrospect, there are certain things they wish they had done differently.

“As an industry, we must do more to break down the barriers that are preventing people from finding the information they need and to support them in making financial decisions throughout their homebuying journey with greater confidence.

“What more can be done to engage and support FTBs earlier in their homebuying journey? How can we collectively better educate this community on the services available and how they can help? How can we ensure greater transparency around the perceived differences between different broker business models i.e., free / fee-paying, to ensure brokers services are better underwood and accessible to all?

“These simple steps could make a huge difference to the lives of the next generation of home buyers in the UK.”

Methodology

Moneybox commissioned Censuswide to undertake research amongst 500 first-time buyers who had bought their first home in the last two years. Fieldwork took place between 15th August and 20th August 2024. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles.