The number of first-time buyers in U.K. may be at a 12-year high
– but what doesn’t seem to have grown in tandem is knowledge of the house-buying process. A troubling recent report
from Santander Mortgages has highlighted that non-homeowners, prior to taking the step to become first-time buyers, have undertaken surprisingly little research into the processes involved in securing a mortgage and purchasing their first home.
The report – which surveyed 2,000 economically active non-homeowners aged up to 40 – demonstrated there were several common misconceptions. Amongst them, 63% of respondents believed mortgage rates are lower in parts of the U.K. where houses are cheaper. 62% believed that on the day of ‘exchange’, you get the keys to your new home. 43% reckoned that should a property chain collapse, you get your costs refunded, whilst 39% work on the assumption that a mortgage interest rate remains unchanged for the life of the loan. One in five even believes that an estate agent will pay for a property’s survey.
What can you do?
While the Santander report doesn’t make a distinction between non-homeowners whom have conducted little to no research, and actively seeking first-time buyers who may have a greater knowledge of the housing-buying process, it does point out that along the path of becoming a first-time home owner there is still a lot of education required.
If we believe that government is right to invest in programs that help first-time buyers, we need the government, banks and estate agents to involve themselves earlier in the process of educating buyers, so they don’t get deterred by policy and unanticipated costs at the starting gate.
For estate agents, this lack of knowledge presents an opportunity to contribute great value to the process at a time when some may wonder what value a high-street estate agent brings to the process. When it comes to a high-value purchase like buying a home, you want an expert to hold your hand all the way through. While applicants can buy a home without an estate agent’s assistance it can be a whole lot harder and far more costly, as mistakes tend to be, without an agent.
Online agents have stepped in for those who are willing to go down that route, but they haven’t proven to be particularly popular so far. The most recent report available from twentyci shows
that the market share for online agents is still hovering at about 7%.
For those agents who run exclusively online, both reports from twentyci and Santander should give some pause for thought. At a time when first-time buyers are in desperate need of professional advice and guidance, such a hands-off approach may not be working best. Moving to a hybrid model that allows agents to connect with applicants online and then provide experience-rich insights on the ground may be better suited to the first-time buyer market.
Enlightened consumers pay dividends
If something you do pays dividends, it gives advantages at a later date. With more knowledge, customers are more likely to move into a significant investment earlier, and more confidently.
Helping first-time buyers better prepare for what will likely be one of the biggest investments they will make in their lifetime is a sure-fire way to avoid unknown costly pitfalls which could deter a purchase. On the flipside we could even expect to see a greater number of new homeowners that won’t hesitate to buy and sell with confidence throughout their economically active lifetime.