What first-time buyers should know about the mortgage market in 2026

Two senior mortgage advisors from Mortgage Scout discuss changes in the mortgage market and innovations available to help first-time buyers get on the ladder.

Transcript

SPEAKER_00 0:01

The Property Crowd. Hello and welcome to the Property Crowd with LRG, one of the UK's largest and most successful estate and lettings agents. Coming up on this episode.

SPEAKER_02 0:15

Yes, you can go online, but they don't understand your mindset, your risk appetite. What's right for your friend or your sister isn't right for you.

SPEAKER_01 0:24

And this. They actually sought out advice and spoke to a mortgage advisor. And a lot of people might be surprised that they could buy a bit more than maybe they would have expected.

SPEAKER_00 0:35

And much more to come as well. And on this episode, we're looking at what first-time buyers should know about the mortgage market in 2026. Joining us on this episode, Chantel Alpino, who's senior mortgage advisor with Scout, part of LLG, and Matthew Leggett, also senior mortgage advisor. Welcome to you both, Chantel. Firstly, I mean just give us an overview. Anything changed in the market so far? We're kind of halfway through the year. What's going on to help first-time buyers, those that want to get onto the property ladder?

SPEAKER_02 1:06

Yeah, that's a really, really good question. Uh, the lenders are really trying to help first-time buyers get onto the ladder. We've seen a number of the bigger ticket lenders on the high street offering minimum £5,000 deposit or minimum 1%. An example from Skipton Building Society is they've got a track record uh mortgage which allows people with a rental history to come on with no deposit. So it's really, really opened it up to um the buyers where they're struggling for deposits at the moment.

SPEAKER_00 1:34

And has that, Matthew, been a big issue, the famous deposit struggle?

SPEAKER_01 1:38

It is really a big thing at the moment, I think, particularly with what some people call the rental trap. People get kind of stuck in that cycle of paying rent, not being able to afford to save a great deal, and therefore not able to kind of get together a great massive deposit. But there's loads of lenders now, kind of the Lloyd's Banking Group, Santander, Skip Dinn, and Accord, like uh like Chantal mentioned, working in that space. So there are definitely options out there.

SPEAKER_00 2:07

And it's fair to say, isn't it, that uh I mean, whatever people think about the first, there's a sort of perception out there, and sometimes perception is not true that no one's buying a house for the first time. But actually, first-time buyers do make up a big chunk, and certainly last year made uh up almost, I think I'm right and say, almost half of UK property sales.

SPEAKER_01 2:27

Well, this is the thing. I think you go on social media sometimes and you think it's impossible to buy a home as a first-time buyer. But actually, I think a lot of people would be surprised if they actually sought out advice and and spoke to a mortgage advisor when they they could kind of find out what they could actually afford. And a lot of people might be surprised that they could buy a bit more than than maybe they would have expected.

SPEAKER_00 2:51

And that I guess is you know encouraging. Chantel, has that been the story so far in 2026 and halfway through? What does it look like doing for the second half of this year?

SPEAKER_02 3:03

Yes, absolutely. Uh the lender affordability has definitely strengthened as well, alongside the ability to put down smaller deposits. You've got the lenders offering six times there's other lenders with even greater affordability. If you're a teacher, for example, um for for buyers now, first-time buyers coming into the market, there are really a tremendous amount of options, and I'll echo what Matt said there is you know, speaking to a broker, understanding early on what's available to you, perhaps a small tweak to that deposit amount might make all the difference. Rates are improving. We saw obviously an increase earlier this year, but actually, it's very settled and stabled, it's very positive. There's plenty of buyers wanting to get onto the market, it's all looking good.

SPEAKER_00 3:50

Is it fair to say, Matt, that people get more help maybe than they used to, first-time buyers, families chipping in, that kind of thing?

SPEAKER_01 3:56

I think so. But on that point, the the older generation who who are now kind of the the parents acting as as the banker for mum and dad are probably as a generation the wealthiest generation of all time, and they can afford to help a little bit more sometimes. So we're seeing products such as joint borrower sole proprietor, which is where a parent can come on to support the affordability, so to use their income towards uh a mortgage application and mean their child can can buy somewhere. So it's not just about parents gifting deposits, which is is something we see as well, but also about how they can help their children maybe buy something in other ways.

SPEAKER_00 4:43

And Chantelle, I mean, the the the generational gap in buying a house is is just extraordinary, isn't it, as to what it once was. I mean, you you you see people, I know what it's like, when I walk the dog, and I see some old boy mowing his lawn, looking very happily retired in his nice loose chinos, the sun's shining. He's standing there in front of a beautiful house that you just know that in 1963 he bought for about 50 quid.

SPEAKER_02 5:07

Yes, it's it's certainly a different time.

SPEAKER_00 5:09

And without any controversy, that's the funny thing. I mean, it was never a controversial thing to buy a house.

SPEAKER_02 5:15

No, and and we still have this sort of strange requirement to own a property. It's sort of instilled our parents' generation, you must own your own home. That appetite to own a property is very much there, having the stability of you know, not renting and and and knowing you know you're paying into your own home and you've got that security in the future. I think there is a real value there in that.

SPEAKER_00 5:36

Matt, talk us through the kind of mortgage innovations for first-time buyers that many people might not even be familiar with. What is what is out there?

SPEAKER_01 5:43

So there's so much going on at the moment. So, like uh Chantal mentioned, about six times affordability. So, that particularly uh nationwide are offering the helping hand product, which is kind of a long-term fixed deal that helps first-time buyers borrow more than they otherwise could to kind of bridge that gap and get on the ladder. And again, like we spoke about the uh the lower deposit options, but there are other things as well where lenders are looking at kind of maybe first-time buyers, younger people, they have a thinner credit history, um, and they're doing things to make sure that they can offer mortgages to people with potentially a lower credit score where they haven't maybe kind of had any adverse credits, it's just by virtue of not having a great amount of borrowing history. So there's there's kind of constant innovations from the lenders, and they are looking to do more, but maybe there could be more support from the government with things like stamp duty to help get the market flowing a little bit.

SPEAKER_00 6:42

Uh, a lot of talk about that at the moment, isn't there, with a new Prime Minister coming in that this idea of getting rid of stamp duty council tax, that kind of thing, it's almost like the never-ending kind of search for the ultimate answer to how to make it more affordable.

SPEAKER_01 6:55

Yeah, and to loop back to your point from earlier about kind of the old chap mowing his lawn, I think a lot of old people, kind of my my parents certainly, they're they're concerned about selling and moving because of the costs that might be involved with that. So things like stamp duty. And if there was kind of some innovation with tax, so a land value tax and and kind of a removal of stamp duty, it might encourage more of that generation to move and to release some of those properties back into the market so they can be family homes again.

SPEAKER_00 7:29

Because we know what it's like when they've had those sort of stamp duty holidays when governments have said, right, we're getting rid of stamp duty or making it massively low. It does Chantel affect the property market. People do get excited, people do start to move.

SPEAKER_02 7:41

Yes, you're quite right. And and you then see the the downside of that as well. So COVID and the thereafter, where we had the stamp duty holiday came to an end, and you saw prices climb quite rapidly. We're now seeing the the fallout from that in the more recent years where house prices haven't been able to sustain that level. There's an awful lot of property on the market. We're seeing in some areas prices have moved down a little bit, there's a shift there. When I'm looking at a remortgage for any existing clients of mine, I was talking to a client yesterday, they bought their property two years ago, their fixed rate's coming up for renewal, they paid 460. The valuation that's now showing on their existing lender system is showing at 456,000. So, in the last two years, in theory, their property's come down a little. So they've made some good endeavours to start chipping away at their balance, but it feels a little bit disappointing for those people now caught up in it. So when you have these holidays, it does create these spikes, and then you get the trough on the other side. There's pros, but there's also cons as well. People need to go in with their eyes open and not get excited, but it's very difficult to stop people getting excited and carried away.

SPEAKER_00 8:57

Indeed. I know, Matt, there's the uh the sort of return of the 95% mortgage. Is there any such thing as a hundred percent mortgage these days?

SPEAKER_01 9:04

Yeah, yeah, there is. So um Skip and Building Society, they they offer a hundred percent, it's called a track record mortgage, which is one where they look at your rental history over the last 12 months, so they're looking at kind of the amount that you've been paying on rent and assess it based on that. And there's other lenders like I think Chantelle mentioned earlier, with uh with kind of 1% or 2% deposit options. So obviously, kind of 100% is one thing, but there are also kind of those 99-98% options as well. Definitely kind of there are more options, and it's good for us to see that there is more competition in that market because when it's just one lender doing it, you they can be very tight with uh with their assessments. Um, so when you kind of have a bit more appetite from others, it gets a bit more competitive and it's it's kind of easier for applicants to actually secure the loan.

SPEAKER_00 9:57

And I I guess there's just a bit I I don't know. I look back, Sean. When I but my I bought my first house with a 100% mortgage, I had no idea really what I was doing, spoke to a mortgage broker beforehand who was a friend of a friend, which often is the case. So very trustworthy. He came up with this, he said, a mortgage sign along here, and then half an hour later in my head, uh somebody gave me some keys, then I moved in, I cooked some fish fingers, and then I realized half an hour later it was actually my own house. You know, it seemed it seemed really straightforward.

SPEAKER_02 10:28

Yes, when you describe it like that. It isn't a difficult process. I think it can feel very stressful and quite overwhelming, especially, you know, everyday people aren't dealing with the mortgages, they don't know what's available to them. They're you know, speaking with a broker who understands the market, gets to know them and their needs is really important. You can wade your way through all of these options and put in front of a client the ones that really suit their needs and requirements, explaining to them what it means for them longer term, painting the picture of the pathway, it makes it less daunting and overwhelming. It's not a difficult process when you know what you're doing. And and the lenders don't make it difficult, in all fairness to them. Yes, they've got strict affordability, they've got individual policy, and uh it's for us to navigate that policy and put the client in front of them that's the right fit for them. Um, but actually, if you get that that stage right, it's a very smooth process for the client. They don't they don't see the bits we're doing in the background.

SPEAKER_00 11:27

I mentioned there, Matt, the the thing about talking to a mortgage broker, and I guess what seemed to have happened, I suppose this sort of goes back to 08 and the financial crash. There was that sense, and I just described it on my first time purchase. It was almost as if you could write a mortgage application on the inside of your leg and everything was fine. And you just oh, here's a here's some money, go for it. And then everybody realized, lenders realized this was there was too much out there, too much on the market, the regulations weren't uh as perhaps they should be. So things tightened down for a bit. Now the choice is back, but I would say, and I'm sure you guys are going to agree with this for maybe for obvious reasons, but objectively, using a mortgage broker seems to me to be absolutely key to getting things right here.

SPEAKER_01 12:14

Yeah, I would completely agree. Like you say, it's it's a heavily regulated market now, so we will hopefully avoid any things like a repeat of 2008, and kind of with that in mind, it just makes so much sense to use a mortgage broker who, like Chantal says, we're plugged into it every day. We we know what's happening, as well as kind of the the original qualifications that we have to do to come into the market. We have to do continuous personal development throughout every year and make sure that we understand kind of any changes to the market, to uh lender policies, so we can always advise on what's the best thing for the client and then make sure that when we do an application, it goes as smoothly as possible. The offer is available to the client as quickly as possible. But as well, kind of on top of that, we also advise on insurance products as well to make sure that once you get into the home, should anything go wrong, you are protected. So things like life insurance that people know about, but then there's also policies like income protection that aren't available to a customer direct, they have to go through an advisor to get those types of cover, and it's just the only way to make sure you and your family are really kind of best set up financially.

SPEAKER_00 13:31

And Chantel, I guess, you know, there are always people who like the DIY approach, and you know, if somebody wants to spend about three weeks Googling every kind of mortgage offer package insurance, then good luck to them, frankly. But I mean, if nothing else, you guys know what you're talking about, you know where the products are, you're only going to want to sell a client the best. Uh, it would be stupid otherwise. So, the one size fits all model I would suggest would be the favourite option for most customers. Would that be fair? Most, certainly most first-time buyers.

SPEAKER_02 14:03

Yeah, absolutely. When I'm advising, for me, it's not about selling a mortgage, it's about giving advice around that mortgage on what's the most compatible and suitable to the client. And yes, you can go online, but they don't understand your mindset, your risk appetite as a family and or a couple decisions that you're making around how long the product should be, whether it's a fixed product or whether it should be tracking the Bank of England, what's right for your friend or your sister isn't right for you. And it's sitting down with someone who understands all the intricacies, can cut through the waffle and you know understand your needs and put in front of you those options that are really relevant. And that's something that I don't think any amount of Googling is going to be able to furnish a consumer with. Um, that's the real value in having having the broker by your side in your corner. We don't work for the bank, we're looking after your interests.

SPEAKER_00 14:57

Yeah, absolutely. And that's there's a lot of reassurance in that. Just a final question to you both, Matt. Firstly, fast forward a year or so, what are you thinking the market's going to look like? I know it's tricky. A lot of global events, of course, that happen many, many thousands of miles away do have an effect on things in this country. A new Prime Minister coming in. Is there general optimism in your market at the moment?

SPEAKER_01 15:20

I think so. I think there's always uh room for optimism. Obviously, it's looking like it'll be Andy Burnham as the new Prime Minister, and he's talked about reforming um statute. And for me, that'd be a real positive for our market. Obviously, there are always global factors with the USA kind of no longer in the World Cup. Does it mean that Donald Trump will get bored and do something reckless? Who knows? Um, anything can happen, but things are looking positive. Banks uh are fighting it out again to be the best priced. So I take that as kind of things are looking good. It's it's a great time to kind of get moving and make the most of these new products that are coming out.

SPEAKER_00 16:03

Indeed. And Chancel, your thoughts, sense of optimism going forward?

SPEAKER_02 16:06

Yeah, I agree with Matt there. I think there's some green shoots coming through. The lenders have been forced to up their game and really be competitive, not just on rate, but on their offering to the consumer, making things a bit more fit for purpose. You know, people who are already in the market have their property, have their mortgage, the rate might be coming up for renewal. Most of them are resigned to the fact that what goes on globally and domestically to a certain extent, we have no control on, and they're building in some sort of mechanisms to protect themselves, have some buffers in place so they can absorb those peaks and troughs as they come along. First-time buyers coming in, they're excited to get on the housing market. They don't know what 1% interest rates look like. The market is what the market is, and can we afford it? It's overall very positive.

SPEAKER_00 16:51

Good to hear that from both of you. Um listen, guys, thank you very much for being with us on this episode.

SPEAKER_02 16:56

Thanks for having us.

SPEAKER_00 16:57

Thank you. Chantel Alpino, senior mortgage advisor with Mortgage Scout, part of LRG, and Matthew Leggett Simile, Senior Mortgage Advisor, too. And we'll see you on the next episode. The property crowd. Find out more at lrg.co.uk.