Legal & General Ignite’s recent data has highlighted a surge in interest in the mortgage market as stabilising interest rates offer a boost, even in the face of prevailing affordability issues.
The findings from the free mortgage research and sourcing platform indicated that last month saw a notable 51% jump in searches for interest only mortgage products. Both first-time buyers and existing homeowners were significantly engaged.
Distinct areas of demand were revealed as the total volume of searches has been on an upward trajectory since June. September witnessed a significant rise in searches for interest-only products by 51%.
Further, reflecting the ongoing economic challenges and long-term market affordability issues, searches representing borrowers interested in shared ownership increased nearly by a third (32%).
First-time buyers remain at the forefront of the market. The data showed that ‘first-time buyer/first-time landlord/non-owner occupier’ was the fourth highest search criterion last month.
Legal & General’s earlier ‘Bank of Family’ report supports this trend, having disclosed that almost half (47%) of homes bought by individuals below 55 years received financial aid from family members.
Despite the dominance of first-time buyers, existing homeowners are also an engaged market segment.
The numbers for borrowers inquiring about secondary residential mortgages rose by 8% last month. Searches related to ‘capital-raising mortgages’ saw an uptick of 3%, marking ‘capital raising’ as the third most sought-after criteria.
These findings suggest that while some homeowners are seeking funds for expenditures like home improvements, others might be looking to merge their existing debts, given the challenging financial landscape.
Moreover, the buy-to-let sector is showing resilience amidst market strains. ‘First-time landlord’ was tied as the fourth top search term in September. Buy-to-let-related searches recorded a slight growth of 1% from August, whereas searches for ‘regulated buy-to-let’ surged notably by 15%.
Kevin Roberts, managing director at Legal & General Mortgage Services, said: “As interest rates find a more stable trajectory, the consistent rise in borrower searches from June is heartening to observe.
“The marked interest in shared ownership and interest-only products mirrors both the recent decision to uphold the base rate and the ever-present market affordability concerns.
“Though the Bank of Family has been a consistent influencer in the property market, our findings robustly underline that family assistance isn’t the sole route to homeownership.
“Despite the encouraging segments of demand, the market remains intricate for advisers, borrowers, and lenders to manoeuvre. Advisers need to persistently refine their strategies, especially with the looming economic ambiguity.
“It’s pivotal for borrowers to acknowledge the dual advantages of consulting a seasoned mortgage adviser: the opportunity to explore products beyond consumer comparison websites and the invaluable expertise from years of experience.”
