How Mortgage Lenders Can Attract Young Home Buyers

 Omolabake Fasogbon

With the influx of younger folks into real estate investment, expectations are high on mortgage lenders to switch games to gain this new market.

This population should particularly be a hot chase to players given the harsh macro-economic environment that has persistently put pressure on mortgage growth, worsening already dire housing deficit.

Indigenous real estate platform, BuyLetLive reported a grim trajectory in real estate in 2024, with Gross Domestic Product (GDP) growth rates stagnating at 0.84 percent in first quarter, 0.75 percent in the second quarter, and a dismal 0.68 percent in Q3. 

Latest findings by the National Association of Realtors (NAR) revealed a significant shift in the real estate landscape, with millennials taking the spotlight as the largest group of home buyers. 

Coming to terms with this reality, the government and indeed players have been constantly charged to liberalise product to enable this group to adequately explore this investment scheme.  Homeownership is believed to not only build a solid financial foundation for young adults, it is an opportunity to build both short-term gains and long-term wealth, experts reckon. 

The evolvement in the industry places new responsibility on lenders to revisit their strategy to convince and win the youth, while they remain relevant to older clients. 

Managing Director of SystemSpecs Technology Services Limited (STSL), Ademola Igbalajobi, said players must not delay in embracing digital transformation, citing newer expectations and priorities among youth segment. 

Identifying such expectations, he said during a presentation at AG Mortgage Bank Retreat in Lagos, recently, “Today’s customers are increasingly impatient, discerning, and tech-savvy, demanding faster and more inclusive services.

“If a customer knows within five minutes that they can secure a mortgage offer for a specific amount, you have captured their interest.”

He noted that immediacy, clarity of deals and empowerment opportunities remained key in wooing young investors successfully. 

He emphasised why lenders must review downwards their age demographics for mortgage investment, asserting that youth population, especially under 35 struggling with rent or unable to save for property investment are highly untapped. 

He further called for the elimination of stringent and traditional practices delaying approval process, stressing real-time tracking of activities across the approval chain. 

“If a document sits on a manager’s desk for two days, the system should notify the managing director, prompting action. This kind of accountability ensures customer needs are met promptly. In capturing youth customers, players cannot afford to compromise transparency, credibility and responsivity. 

“By reengineering internal workflows, integrating digital monitoring tools, and fostering greater collaboration across departments, institutions can eliminate delays in the approval process,” he said. 

In seeing to process upgrade, Igbalajobi insisted that staff members must also undergo refinement in tandem with reality. 

“They must be sufficiently empowered to facilitate transactions,” he maintained. 

He proposed a raised standard aligning with advancement in international market where all processes in home buying are been digitised. 

“This encompasses virtual property tours and seamless online mortgage applications. Imagine a scenario where a salesperson meets a customer on-site, discusses terms, and finalizes a mortgage agreement without the customer ever stepping into a branch,” he remarked. 

He urged mortgage players to develop collaborative mindsets, citing successful partnership between banks and fintechs that have engendered a smarter, faster, and more customer-centric solutions. 

“Fintechs are also innovating, but they cannot do it alone. They need you because you hold the licenses they cannot obtain. Allowing for a symbiotic relationship between traditional and emerging players will translate into immense growth”, he assured. 

Also important is maintaining a strong online presence as well as continuous education and engagement with this population via digital platforms, including webinar, to demystify mortgage process. 

“Many young professionals lack a clear understanding of how mortgages work or the benefits they offer. By prioritising customer education, institutions can build trust and attract a new generation of homeowners, particularly those currently feeling excluded from the housing market due to perceived complexities or costs,” he said. 

According to the expert, the future of mortgage lies on two pivotal pillars – customer empowerment and employee engagement.  

These, he asserted, are essential drivers of growth, profitability, and long-term resilience. 

“You have the customer base, the brand equity, and access to funding. The real challenge lies in harmonizing your systems and workforce to consistently deliver exceptional value and elevate customer experience.” he enlightened.