Borrowers try to beat further rate increases
In an attempt to beat future rate increases, searches by homeowners wanting to remortgage after just six months climbed by 30% in February, according to new research from Legal & General Mortgage Club’s SmartrCriteria tool.
“The cost-of-living squeeze and rising interest rates are clearly driving borrowers to remortgage and lock into low fixed-rate products that are still available on the market,” Kevin Roberts, director of Legal & General Mortgage Club, said.
Read more: Remortgage activity will remain high throughout 2022 – LMS.
While many consumers tried to manage their mortgage repayments, strong demand from buyers also continued despite rising inflation and other costs, particularly in the buy-to-let sector. Searches for first-time landlords continued to climb, rising by 23%, while searches for those with corporate lets grew by 28% in February.
It was also observed that borrowers were becoming increasingly reliant on financial support from their loved ones to complete their purchase plans.
Searches for those with gifted equity jumped by 119%, and searches from landlords with gifted equity followed this trend, climbing by 15% in February.
Searches by advisers for borrowers with gifted deposits similarly increased by 6%, perhaps suggesting that the cost-of-living squeeze has resulted in first-time buyers needing a bigger deposit for completion.
Read more: Bank of Mum and Dad helping 61% of first-time buyers.
Searches for interest-only mortgages grew by 33% in February.
Roberts emphasised that advisers have a critical role to play in finding products for borrowers that can help them keep their monthly repayments low, while ensuring they have a mortgage that continues to meet their needs.
“As advisers seek to support many of their clients to find new mortgages, technology remains key to processing these requests quickly and efficiently. Research tools that consider criteria, affordability, and products are an ally to intermediaries, helping them match clients that have a broad range of borrowing needs with the right lenders,” he said.
“Taking advantage of these capabilities will put advisers’ businesses in a good position to help them thrive and, importantly, allow them to spend more time giving great advice to their customers,” Roberts added.
Legal & General Mortgage Club’s SmartrCriteria tool tracks product searches from over 8,000 advisers, shedding light on the purchase trends witnessed by brokers across the industry.
