Advice for first time house buyers: An Interview with our Founder, Gary

Our Founder, Gary Oxborough, sat down with Lydia of Tao Digital Marketing as part of their Founder series to chat through the history of the business as well as some advice for first-time buyers. The video is linked below and also transcribed.

So, tell us a bit about Barlow Irvin Financial Services. How did it all start?

I came into the mortgage industry 18 years ago. I worked in finance for a few years, various different types of finance, but not the mortgage industry. I actually came into it through going to see somebody about a mortgage myself, my wife and I went to meet a guy in Bolton at his office and sat with him for the best part of two hours talking through everything.

My wife knew I was looking for something different. When we walked out of the room, she just turned around and said: ‘Why don’t you do that? You seem to know as much as he knows, why don’t you have a look at it?’

I thought, that’s interesting, maybe, so I went away, did a bit of research, passed the exams and decided to go with it. I went through the route that most normal people do, so I worked for one of the big national companies. I did that for two to three years then decided that I wanted to go out on my own. 

For quite a while I was self-employed - the typical ‘back bedroom business’ - I did that for a few years and then got to the stage where I thought, I want to take this a little bit further. That’s where Barlow Irvin was born.

I had a good client of mine who had asked me for a long time if she could work for me. She worked as a legal secretary and she’d mithered me for two years saying, can’t I work for you? Eventually I decided that I needed some help, so Cath joined us eight years ago now, and she’s still with us now. She’s the office manager, people say she runs the business and not me, but there you go! She’s certainly the boss.

We just went on from there. Brought a couple more people on, and we’ve now got a team of six, which is three mortgage advisors including me, two administrators and an insurance specialist. It’s great, I love it.

How did you end up knowing as much as that original mortgage broker? Was it just a passion that you knew a lot about?

It was just a bit of research. I worked in finance, for my sins I worked in a tax office once upon a time, so I’d always been in and around finance and money. It was just a case of me doing a bit of research before we went to see this guy and we sat down and talked through it. I threw a few ideas in, he threw a few ideas in and we came to a solution. 

As much as it’s about mortgages, it’s a people job. One of my good friends used to say that we get paid to go and sit on sofas and drink tea, which is a pretty cool job, actually! 

You mentioned that you’re a team of six now, and that’s grown over time. What have you found to be the best channels for growing? I know that you mentioned word of mouth as well. Is that your most popular referral channel?

Yes, it is. We’ve had a couple of people come on through normal recruitment, but actually the team itself are quite close-knit, so Kath, who like I said has been with me for eight years now, her sister Claire works in the business. We got a girl who I knew through the business, which is Jade, who is our insurance specialist. We’ve recruited through normal channels, advertising and agencies, for the other guys that are with us.

The mortgage industry, probably like a lot of others, is an industry where everybody knows everybody. You get word of mouth about people maybe looking for something new, so that’s how we’ve done it. Like I said, we’re a team of six at the moment, hopefully we’ll grow a little bit bigger.

Where does the name ‘Barlow Irvin’ come from?

That’s a good question, it’s a bit of a random name. I mentioned wanting to grow the business and, with Cath coming on board, wanting to change a few things around. For a year or two before she came on board, I thought I wanted to formalise things, like my name. I was just sitting at my desk at home scribbling ideas down, and Barlow Irvin was one of the ones I wrote down. My wife was at home and I called her in and she said “Oh I love it, yeah, it's great!” 

The year before that happened, my dad passed away between Christmas and New Year, and ten days after my dad died, my father in law died. They’d both been ill for a while. It wasn't a big shock. My dad's middle name was Irvin and my fathers in law's middle name was Barlow, and it just seemed to flow. So that’s where the name comes from. 

Of course I’m Gary, so I set up the website and set up the email address and didn’t realise till three months later that my email is gary@barlow-irwin.co.uk, so I do get asked to speak to Gary Barlow occasionally!!

There's lots of stories in the news at the moment about the rising costs of houses and it seems like it’s never ending to be honest. So why in particular are house prices going up so much?

Really good question, and a really difficult one to answer. There's lots of different things that contribute to the housing market, and I suppose the main one is simply supply and demand. There are more people looking for houses than there are houses available. That's it, it’s basic economics. 

With the housing market there's lots of other things you can throw into that as well, lots of other bits of equations. Obviously the interest rates at the moment, despite the recent rises that are obviously very much in the news, they are still incredibly low so it's still really, really cheap to borrow money. That makes a big difference. 

Then on the back of that we have the pandemic and the follow on from the pandemic - the fact that people want to look at how they live and people looking to move house because they want to work from home. They’ve realised they don’t need to work anymore, move out into the country with different needs and things like that. So basically, everybody's looking at a change in lifestyle which basically goes back to supply and demand.  

It was actually in the news this week that the average house price in Great Britain has gone up to £350,000 for the first time ever, which isn’t great news to hear as a young person trying to save for a house. That had risen 1.4% from February, which is the biggest jump month to month since 2004.

That goes down to what Rightmove has said about the supply and demand, that there's twice as many buyers as there are sellers right now. So how does that sort of impact your customers at Go2Mortgage?

I’ll start with the first thing really, the £350,000 figure I always take with a pinch of salt. We are a country of vast differences and house prices between the North and the South. We’re based in the North of England; our average house prices are nowhere near £350,000. That doesn’t mean things aren't going upwards here, of course they are, and yes, it is starting to impact our buyers. 

We haven’t really seen any first time buyers who maybe haven't bought where they would’ve done, but maybe people are starting to have to think a little bit more about what type of property they want. Maybe be a little bit more realistic with your expectations. 

The flipside to this is that existing homeowners are obviously making money out of it, so that is good on their side. It's a bit of a double edged sword, as always. But we are working a lot with our clients around the smaller deposits these days, that sort of thing. We are still seeing that there's plenty of activity in the market.

You do have to question those figures sometimes, because I was thinking, £350,000 in the North? It's probably more of a Southern figure to be honest!

Yes, it is. I would say certainly for first time buyer houses in our area, our core area is sort of round Bolton/Manchester area, you’re maybe talking £130,000-150,000 maybe. £350,000 up here would get you a nice detached property, probably not your typical first time buyer house.

Exactly. So do you think that the rise in interest rates, 0.75%, is going to slow down the house prices rising?

In itself, maybe not, strangely. The rise in interest rates is basically there to try and cool inflation. The problem with inflation at the moment is that it's probably driven more by fuel prices, everybody knows the gas, the electric… Every time you try to fill your car up with petrol it's costing you more money these days. 

The idea behind putting the interest rates up will reduce the amount of money people have got to spend, which should bring inflation back down. Obviously, it does feed into mortgage costs. Banks have been putting interest rates up on fixed rates for a few weeks now. They've been anticipating this coming, and some of the people I’ve been speaking to at the banks are saying they're expecting interest rates to go up by one and a quarter percent by the end of this year. So there is a little bit more to come. 

For somebody of my age, it's still incredibly cheap. I have a lot of customers who have never seen an interest rate rise in the entire time they owned a property, so it is a new thing for a lot of people, but we are still in a  really good spot with it. I think it will start to cool - you go back to supply and demand, it can’t carry on the way it has been. Things will start to slow down a little bit. 

Will there be a crash? No, in my honest opinion… I don't think there will be. I think things will cool down and things will become more stable.

It's interesting that you say that, because when I speak to my parents, for example, it used to be maybe fifteen percent or something like that.  

Fifteen percent is the worst it was, yes. If you speak to anybody of a certain age, they would tell you fifteen percent. 

It’s good to at least hear that it's dropped dramatically since then. So let’s touch on remortgaging now, with everything increasing a lot of borrowers don't realise that they can apply up to six months before the current deal ends and lock those rates in.

Is it worth remortgaging, and what sort of advice are you giving to your customers right now? 

Yes, there’s certainly an advantage in starting the process early. It is always worth looking at what you're doing, especially if you're on a fixed rate deal for example, or some sort of deal with your lender that's coming up towards the end of that time. You certainly need to be having a look.  

We used to look at three or four months before the end of the deal to speak to our existing clients. We are now looking towards six for a couple of reasons, the main one being that if  rates are not starting to rise, as you say, you can lock yourself into one now. 

As long as you've got your application in with the lender, they will honour the rate that you booked at that point. Mortgage offers typically will last up to six months, as long as you pick the right lender and the right product, it's a good idea to get something in place nice and early.  

You mentioned earlier about the lifestyle changes that have happened since the start of the pandemic, with people wanting more room to work from home and things like that. People are wanting bigger gardens so they can sit out on their lunch break and things like that as well.

So how much of a difference have you noticed in the sort of properties people are looking for since the start of the pandemic?

You’ve just hit the nail on the head. I think people have realised through the lockdown that space is important, and location used to be, you know, like Location, Location, Location on TV. People wanted to be near work or near the train station because you had to go into the office everyday of the week. Now that isn't the case, and people may never be going to the office, or going once or twice a week. Then, they can look to move out of the expensive areas and move somewhere with a bit more space both inside and outside - garden spaces are premium at the moment. 

We’ve certainly seen a lot of our clients looking to move into something with a little more space, and take advantage of low interest rates and things like that. We see quite a few clients looking to upsize considerably, which was a little bit of a surprise at first for us, but it has definitely been a trend.

So have you noticed a difference in demand since the end of the stamp duty last year?

Not particularly. I'll be honest with you, in my opinion, the stamp duty holiday was a mistake. I think a lot of people would probably agree that it created an artificial demand and certainly an artificial bottleneck, with people trying to get purchases through in time. It caused quite a few problems in the market especially, with the legal side with solicitors. 

There was an awful lot of panic and people getting really stressed out because they had to hit a certain deadline. People that needed the help the most, it didn't really impact. Realistically, if you're selling a property, your stamp duty is probably built into your equity anyway. So it's not about trying to find a few thousand pounds extra on top of your deposit, it's taking a little bit out of your equities - not as big of a deal. 

Surprisingly, there was a bit of a low afterwards because there was this bottleneck. But actually, since September as we’ve talked about before, the market’s just continuing to thrive, so the stamp duty holiday wasn't needed and probably created more problems than it needed to.

Lastly, there's also been a lot of talk at the moment about advice for young people like myself, who are trying to get onto the property ladder.

There was a story last week about ‘Stop buying Greggs! Stop going out for your avocado on toast! Stop buying coffees everyday and how much that would save!’ 

This is a question we get asked a lot - how much can we help to get the deposit in place? There's a few things, and as condescending as it might sound about the Greggs and the avocado on toast and not having your latte in the morning, there is a lot to say about having a look at your spending. 

We, as a matter of course, would normally stand with the client with some bank statements and go through them anyway when we are looking at affordability for a mortgage. I have literally lost count of the number of people where you can go through their bank statement and there are items in there they don't use anymore, e.g. gym memberships, clubs and subscriptions. 

An awful lot of people might not recognise the stuff that comes out of their bank statement - ten quid there, five quid there, and it does add up. So as much as the ‘Don't go to Greggs for your dinner’ may be a little bit on the far-fetched side, there is a lot to be said for that.

Obviously, outgoings is one thing, if you can increase your income that's another one. If you're really, really keen to get on the housing market, then maybe look at a second part-time job with a little bit of extra work somewhere on the line. 

Obviously, consider overtime or whatever you can in your current job, or if you need to pick up something else. For things that you don't need around the house any more, Ebay’s great! 

I think the one key piece of advice I would say is if you are really keen to save for a property, pay yourself first. What people will usually do when they're putting money into a savings account is wait till the end of the month, and whatever they’ve got left, they move it across into a savings account. What I would say is do it the other way round, so on pay day transfer the money into your savings account and leave enough in to cover your essential bills and some extra.

Set yourself a specific amount to put in your savings account. What you will then do naturally is adjust your spending accordingly, and as long as you're disciplined and don’t keep dipping into the savings that way, the priority, which is to save for your house, is taken care of from the start. 

The other thing I would say is that there are a few schemes on the market that will help first time buyers. There are quite a few knocking around, but the most common one that everyone will know about is Help To Buy. Help To Buy is obviously coming to an end, and at the moment it’s only available on new build properties. There are some schemes around that are very similar. There are actually a couple of private versions of Help To Buy that have recently come to the market, and lenders who will do that sort of thing. 

Now, these aren't right for everybody - they do need to be looked at because there are positives and negatives. As with everything, you need to be fully aware of what you're doing. But if you speak to a proper professional and have a look at it, it might just be the answer you're looking for. 

Interesting, thanks for sitting down with us Gary. It’s been very good to have a chat!

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