Market remains robust despite ongoing issues, says Legal & General
Despite concerns over rising mortgage rates and inflationary pressures, the mortgage market was still highly active, with specialist sectors driving activity, data from Legal & General’s Ignite platform has revealed.
While affordability remains a key barrier to homeownership, there has been increased demand from first-time buyers. June saw a rise of 14% for searches on behalf of first-time buyers, while searches in relation to affordability increased by 21%. Also, searches in relation to minimum income requirements rose by 17%.
Activity in the private rental sector continues to bolster mortgage market activity too, with a 32% increase in searches for ‘multi-unit freehold blocks’ and a 38% increase in searches for rental income. Searches for top slicing rose by 49% in June, while searches in relation to regulated buy-to-let increased by 15%.
Ignite, the enhanced version of the platform formerly known as SmartrFit, said the search increase of 53% for interest-only mortgages – the most common search term in June – meant that borrowers could be looking to reduce their monthly costs for a period of time, before switching back to a capital repayment mortgage if rates become more favourable.
A 40% increase in searches for Help to Buy was also seen last month, although the deadline for home purchase completions under the scheme closed by the end of May. Legal & General said there was strong demand for similar government-backed schemes to tackle affordability issues.
Searches in relation to Right to Buy and Right to Acquire increased by 17% in June, while searches regarding ex-local authority properties increased by 29%.
Ignite’s data also showed that overseas buyers continued to invest in the UK property market, with searches on behalf of these customers increasing by 16%. Searches on behalf of customers with a permanent right to reside or indefinite leave to remain increased by 38%.
“It’s clear that the mortgage market remains robust despite ongoing issues with affordability, rising interest rates and stubborn inflation,” commented Jodie White (pictured), head of mortgage products and transformation at Legal & General Technology. “It’s positive to see that market activity is still being driven by specific sectors, including buy-to-let, overseas buyers, and by increased demand for particular property types.
“During this time, it’s vitally important that advisers implement new technologies to best manage demand for mortgage advice across various sectors. Advice is incredibly important right now and advisers have a crucial role to play, supporting buyers and ensuring they have access to the full range of options available to them.”
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