How can lenders adapt to Generation Z?

Sonya Matharu, mortgage broker at The Mortgage Mum, said that lenders’ affordability criteria cannot keep up with Generation Z’s lifestyle choices. For example, younger people might be doing freelance work as well as – or instead of – receiving a salary. Matharu wanted to “see lenders think outside the box” in better supporting this.

Divergent income streams were a concern for Gary Das, founder and managing director at Active, who suggested it can be hard for lenders to understand the variety of income sources for young people – such as influencers who are making money “through YouTube channels” – in addition to a day job.

He said this might not be seen as sustainable income by lenders, as well as the advent of cryptocurrencies not quite being understood by the mortgage market.

In terms of marketing mortgages, social media was cited as an important tool in reaching the younger demographic. Matharu mentioned her main client base came from Instagram, as clients “want to know the person who is dealing with their biggest financial commitment”.

Das highlighted more contemporaneous forms of marketing in terms of video content, to better plant the seed to procure more leads and said doing this enabled him to set up an “ecosystem” whereby hundreds of leads are organically reached each month.

However, the importance of financial education emerged as key. Sam Mason, mortgage broker at Mortgage Medics, and firmly within Generation Z at the age of 22, highlighted the importance of younger people being taught about negative impacts on their credit scores, and Das said “education needs to come much earlier”.

Mason proceeded to point out that we operate in a subscription-based society, and so “as soon as they can get credit” younger people will do so. Often, though, they would not be aware that something like a car loan is a form of credit, according to Mason, and so this unwittingly impacts credit scores.

Matharu concluded the session by commenting that there is a huge drive for innovation within the mortgage industry. Generation Z are changing the landscape in terms of consumer and lifestyle behaviour more broadly, and so there is “alignment – and we’ve never had something like that before”.