Some 52% of UK adults aged 18-34 have a fairly or very bad understanding of the whole mortgage process from beginning to end, according to research from Paymentshield.
In comparison, around a third (32%) of 35 to 44-year olds stated the same lack of understanding, with this dropping further again to 25% among those aged 45-54.
For the first time in a decade, the average age for a first-time buyer rose this year from 30 to 31, with the average cost of a first home coming in at £196,223 according to research from Savills.
First-time buyers locked out of South of England
UK adults under 35 displayed a similar lack of understanding of the types of insurance required at different stages in life, with 53% declaring their knowledge fairly or very bad.
James Watson, sales director at Paymentshield, said: “The finding that 25 to 34-year olds are nearly seven times more likely to say they would prefer price comparison sites to seeking financial advice if they were purchasing home insurance is alarming, and risks leaving this already vulnerable cohort with insurance unfit for their needs.
“Hopefully, measures like the implementation of the FCA’s GI pricing practices study will go some way to address this by creating a fairer marketplace that offers consumers products focused on value, rather than an automated race to the bottom where the cheapest price is offered at the expense of all other considerations.
“Even beyond the end of Stamp Duty holiday, the FTB market presents a key opportunity for advisers: this is a cohort lacking in confidence and knowledge about both the mortgage and insurance processes, meaning that they need more guidance. Advisers are perfectly positioned to support them – and not just for a one-off transaction: FTBs also have more overall needs in terms of General Insurance.
“By targeting FTBs and providing valuable, tailored and, as the YouGov survey suggests, necessary guidance, advisers have the opportunity to become a trusted expert who these buyers can rely on and recommend for the rest of their life.”