FTBs fail to differentiate between bank and IFA
Research from the UK Mortgage Council suggests 43% of potential first-time buyers found speaking to an independent financial adviser “very useful” while 42% said the same of bank advisers.
The UKMC first-time buyer report said: “For first-time buyers, familiarity is a key factor in mortgage decision-making.”
The research found over half of those who were new to property ownership and those returning after a break took out their mortgage with their main financial institution, significantly higher proportions than any other groups of mortgage holders within the Mortgage Council’s cohort.
The report added: “Main financial institutions have the opportunity to engage even higher numbers of first-time buyer customers than they are already achieving.
“At least 34% of those who did not proceed with their bank or building society still made contact with them in some way before going elsewhere.”
But the report said arranging a mortgage through an independent financial adviser or mortgage broker had a significant impact on whether a mortgage was held at a potential first-time buyer’s MFI.
Of the potential first-time buyers who went direct to their existing bank or mutual, three out of five had their mortgage with the same institution.
Those who went through an independent financial adviser or mortgage broker were 23% more likely to have a mortgage at an institution which wasn’t their MFI.
The report added: “The first-time buyers who did arrange their mortgage through an IFA told us that the most important factor in choosing this route was to get impartial advice, followed by a need to make the application process quicker and easier.”