A Different Type of First Time Buyer
Read the full article here: “The Intermediary July 2026 – page 24-25 - The below article was published by The Intermediary | July, Issue 42”
By Alpa Bhakta, CEO Butterfield Mortgages Limited
First-time buyers (FTBs) only make up a relatively small proportion of those purchasing a property in Prime Central London, but there are some interesting dynamics nonetheless. Unlike a typical FTB, struggling to save for a deposit, many entering this market are supported by significant family wealth. Some will be international students whose families prefer property ownership over rental fees. Others will be young professionals working in the City, building careers while receiving financial assistance from parents to secure a foothold in the capital’s property market. At Butterfield Mortgages, it is rare for us to see FTBs earning enough to purchase in Central London without family support, although occasionally it does happen.
The affordability challenge that faces many FTBs looks very different for our clients at Butterfield Mortgages. In many instances, affordability is assessed not only on the individual’s financial position but on the wider family, too. Parents may be providing financial support without wanting to appear on the mortgage, and this requires looking beyond traditional underwriting metrics.
Understanding the source of wealth is critical and extends beyond the immediate transaction to examine the sustainability of the arrangement over the life of the loan. Questions arise around how a borrower would continue to service the mortgage should circumstances change or anticipated wealth transfers not materialise when expected. That makes the calculations more complex, which often requires more bespoke solutions. Additional collateral, interest service reserves or other forms of security may be utilised to ensure borrowers remain protected and financially resilient in a variety of scenarios.
Stamp Duty is another important consideration, particularly for international buyers. While the costs can be significant, they are generally factored into purchasing decisions from the outset. Buyers operating in Prime Central London tend to approach these transactions with a clear understanding of the associated tax implications and incorporate it into their overall financial planning.
A market unlike any other
Much of the recent commentary surrounding the Prime Central London market has focused on stagnation. While transaction volumes have undoubtedly slowed, that narrative only tells part of the story. The market’s challenges are not primarily driven by falling property values. Instead, they stem from a reduction in liquidity and demand.
The pool of active buyers is smaller than it has been historically, with international demand in particular having softened considerably. This shift has altered the balance of power in negotiations. Buyers who remain active in the market recognise the opportunities available to them and are often negotiating aggressively on price. For buyers with access to family support or long-term investment horizons, this presents a potentially attractive window of opportunity. Properties that may have seemed unattainable a few years ago are now available at more negotiable pricing levels, while the volume of stock on the market has increased significantly. Owners looking to sell are often more willing to engage in meaningful negotiations, creating opportunities that have been rare in Prime Central London for much of the past decade and a half.
The changing buy-to-let (BTL) landscape is also contributing to this trend. As some landlords exit the sector, additional stock is becoming available, broadening the choice available to prospective owner-occupiers. London remains one of the world’s most desirable cities in which to live, work and study. While current market conditions present challenges, they also create opportunities for those able to enter the market at a more favourable point in the cycle.
For many buyers, particularly FTBs with access to support, the long-term outlook remains compelling.
The role of specialist lenders
Adapting to a more complex market requires lending solutions that move beyond standardised affordability models. At Butterfield Mortgages, competitiveness has increased significantly, with pricing becoming increasingly attractive, while maintaining a focus on bespoke underwriting.
Rather than relying solely on conventional income multiples, assessments take a client’s full financial profile into account. This includes wider assets, income streams and overall wealth position. Flexibility is particularly important when dealing with HNW and internationally mobile borrowers, as their financial profiles are unlikely to fit traditional lending criteria. Solutions such as interest capitalisation can provide additional flexibility, provided borrowers can clearly demonstrate their ability to sustain their lifestyle and manage future interest rate movements. This is where specialist lenders, private banks and experienced brokers add the greatest value. Complex cases require a holistic view of a borrower’s financial position and the ability to structure solutions around individual circumstances.