The path to homeownership is often filled with obstacles, especially for first-time buyers with adverse credit. With Stamp Duty Land Tax (SDLT) rates changing from 31st March 2025, it could add thousands of pounds to the first-time buyer’s home move, so it’s crucial to understand these barriers and provide tailored mortgage products that suit their needs.
In this blog, we explore the current landscape for first-time buyers in the UK and Scotland, highlighting how brokers can assist clients with bad credit in securing mortgages. With 37% of first-time buyers in the UK identifying affordability as the biggest barrier to purchasing a home, the need for expert guidance has never been greater. Drawing from Bluestone Mortgages’ latest research report and critical trends in the first-time buyer journey, we examine how brokers can navigate these challenges to support their clients better. Likewise, we touch on how Bluestone Mortgages’ Deposit Unlock (95% Mortgage Product) range can help your clients overcome these hurdles and achieve their homeownership dreams.
Here is a short summary of the key topics we’ll cover:
Buying a home is often considered the pinnacle of financial independence, yet for many first-time buyers, this dream feels unattainable. The UK housing market has been heavily impacted by rising house prices, inflation, and the ongoing cost of living crisis. According to our recent research, the average deposit for first-time buyers in the UK is £53,414, but this figure can be significantly higher in regions like Greater London, where deposits often exceed £100,000. Nearly 37% of prospective buyers identified affordability as the main barrier, while another 34% pointed to the difficulty of raising a large enough deposit. Furthermore, mortgage rates remain a concern, with 27% of respondents citing them as a critical issue. For those with adverse credit, these challenges are amplified, as traditional mortgage lenders often see them as high-risk borrowers. For first-time buyers with adverse credit histories, the road to securing a mortgage may seem even more steeper. However, there are complex credit lenders like Bluestone Mortgages who specialise in providing flexible and tailored solutions, making it possible for those with financial blips to secure a mortgage. At Bluestone Mortgages, we believe people should be given credit where credit is due. That means where other lenders see ‘unlendable’, we see a community of people who deserve to be considered for a loan based on their unique life circumstances rather than a vanilla financial history. Understanding the specific products designed for bad credit first-time buyers is crucial to helping borrowers navigate this difficult terrain. Especially in the coming months, with Stamp Duty Land Tax (SDLT or Stamp Duty) rates changing. From 31st March 2025, the temporary increases to the thresholds that were put in place in September 2022 are due to come to an end. First-time buyers, who will be the most affected, currently pay no stamp duty when buying a home worth £425,000, and if the cost of the property is up to £625,000, they are also eligible for discounted rates (5% on properties from £425,001 to £625,000). This threshold will drop to £300,000, meaning they will go from paying nothing to paying £6,250 on stamp duty and will only receive first-time buyers’ relief on properties up to £500,000 (5% on properties £300,000 to £500,000). As a broker, understanding these changes will be crucial in advising first-time buyers over the coming months.
First-time buyers in Scotland face many of the same challenges as their counterparts across the UK. According to research, more than a third of potential first-time buyers don’t know where to get guidance on securing a mortgage. This is where brokers can make a significant difference. Brokers need to be aware of various products, including the Deposit Unlock Scheme and Shared Ownership, that can assist buyers with limited deposits. With Bluestone Mortgages, brokers can offer clients access to products specifically designed for disenfranchised first-time buyers. For example, Bluestone’s Deposit Unlock range takes previous financial difficulties into account helping first-time buyers who may have faced credit issues due to unforeseen life events, such as illness, job loss, or divorce. Deposit Unlock is an innovative mortgage guarantee scheme created to help borrowers secure a new-build home with a deposit of only 5%. As the only complex credit lender to currently offer the Deposit Unlock scheme, first-time buyers can apply for a 95% LTV new build mortgage with a deposit of only 5%. The scheme applies specifically to new build houses and flats from selected developers. The Deposit Unlock product range with Bluestone Mortgages involves no credit scoring and includes both standard and fee-free options. This range provides brokers with solutions that support customers with adverse credit, or those who are self-employed or contractors. As brokers, emphasising your understanding of this product can significantly impact your client’s ability to secure a first-time buyer mortgage. Learn more about our Deposit Unlock range here.
Only three in ten prospective buyers are currently using a mortgage broker, with another third planning to engage one in the future. This leaves a large portion of the market underserved. Brokers are in a prime position to guide buyers through the complexities of securing a mortgage, especially for those with adverse credit. The most common barriers identified by first-time buyers include general affordability, the size of deposits, and insufficient income. As brokers, it’s essential to help clients explore all available options that could significantly lower the barriers to entry. A key challenge brokers now face is how best to engage an increasingly digitally minded generation of first-time buyers, to guide them through the purchase process. There are a few steps brokers can take when reaching out to the next generation of buyers, which we will break down below:
Create awareness through the channels they use…
To effectively engage the next generation of homebuyers, brokers must leverage the digital channels that younger audiences frequent. Social media is a dominant force, with around 57 million UK users on platforms like YouTube, and nearly 28 million are active on Instagram and Threads. Notably, TikTok has seen rapid growth, reaching almost 20 million users in the UK, where people spend an average of 27 hours a month on the platform In fact, Tiktok has overthrown Google as the world’s most popular search engine amongst Gen Z with a staggering 40% of the younger demographic preferring to get their information online from creators instead of traditional methods1. With such widespread social media usage, brokers have a significant opportunity to reach prospective buyers through video content and targeted ads on these platforms.
By leveraging these channels, brokers can build trust and establish themselves as approachable experts. Sharing relevant, easy-to-digest information helps break down complex mortgage topics into accessible formats. Consistency is key—regular updates, interactive Q&A sessions, and even educational live streams can help build a following and keep brokers top of mind when prospective buyers are ready to move forward. Using social media advertising tools to target specific demographics, like first-time buyers or those with adverse credit, can further amplify reach and connect brokers with the right audience.
Stay up to date on products in the market to provide valuable advice…
In today’s rapidly changing mortgage market, first-time buyers can easily feel overwhelmed when trying to find the right products that fit their unique needs. This is where mortgage brokers come in, offering essential guidance to help simplify the process. By staying current with the latest developments and focusing on the specific challenges that first-time buyers face, brokers can provide valuable insights. They can offer tailored advice on government schemes and specialised mortgage products, particularly for individuals with adverse credit. This approach not only aids buyers in navigating obstacles such as insufficient income or high deposit demands but also helps them secure the most advantageous deals available. Our media hub has lots of educational content for you to explore and learn more about any trends or upcoming products.
First-time buyers typically have a solid understanding of property prices and the types of homes they can afford. However, taking the first step onto the property ladder can be daunting due to the complex mortgage process, which involves navigating various legal and administrative hurdles before they can finally receive the keys to their new home. Several factors, including inflation, house prices, and mortgage rates, will shape the future of the first-time buyer market. With the average house price now 10 times the average salary, many would-be homebuyers are simply priced out of the market. However, brokers have a significant opportunity to influence the future of homeownership by providing tailored advice and educating complex credit customers about the innovative mortgage products available to them. Recent research from our report shows that nearly 483 respondents experienced adverse credit events in the past year, highlighting a considerable market for bad credit mortgages. Bluestone Mortgages is leading the way in offering products that meet the needs of this demographic, assisting first-time buyers who may have encountered financial difficulties in the past. Brokers should stay informed about the latest trends and products in the adverse credit market. By understanding how Bluestone Mortgages can support clients with bad credit, brokers can ensure they provide the most relevant and effective solutions.
Building trust is also essential for brokers, as it positions them as long-term contacts for homeowners. First-time buyers may go through multiple future property purchases and remortgages and represent a key demographic. By guiding buyers through the homebuying journey and fostering relationships, brokers become the go-to advisers for future mortgage and financial transactions. For more insights and data on the barriers to homeownership and to learn more about how Bluestone Mortgages can assist your clients, refer to the full report here.
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