The latest data from Knowledge Bank has highlighted a sharp increase in searches for financial solutions and debt consolidation options. This comes amidst a hike in interest rates and widespread economic difficulties.
The data, gathered throughout June, revealed a trend in ‘Missed or Late Payments’ in the residential mortgage sector for the ninth consecutive month. There was also an increase in searches relating to ‘Maximum Age at End of Term,’ suggesting lenders are attempting to extend mortgage terms or switch to short-term interest-only options to help borrowers.
Such a shift likely follows Chancellor Jeremy Hunt’s recent meeting with banks and building societies, which resulted in a pledge to support struggling borrowers.
Other sectors echoed this trend. In the ‘Second Charge’ sector, many individuals were found to be seeking debt solutions. There was also a spike in searches for lenders who assist homeowners with ‘Capital Raising for Debt Consolidation,’ signalling the heavy financial burden carried by many households.
An uptick in searches for ‘Interest-Only Mortgages’ also occurred for the first time since June last year. The ‘Equity Release’ category saw a renewed interest in ‘Leasehold Remaining Term,’ ‘Early Repayment Charges,’ and ‘Ex-local Authority Houses.’ In contrast, the bridging and commercial sectors showed little change in their top search terms.
Knowledge Bank CEO, Nicola Firth (pictured), said: “Amidst the mounting financial challenges faced by borrowers, many are desperately seeking assistance with their mortgage terms and additional borrowing for debt consolidation.
“Brokers are exploring options to ease their clients’ financial situation. For borrowers transitioning from a fixed-rate, the prospect of moving to a significantly higher rate is particularly onerous. Broker searches on Knowledge Bank evidence that borrowers are resorting to every possible means to find solutions for their clients. Considering ways to extend mortgage terms, exploring second charge interest-only options, and using second charges to raise much-needed capital for debt consolidation.
“The crucial role of brokers in assisting both existing and prospective borrowers has never been more important. At the same time, brokers are encountering unparalleled challenges in their efforts, as they navigate rates that are being pulled every few days, and an extensive array of criteria to locate a lender capable of providing assistance. The task of finding a lender who can offer the necessary help has become increasingly demanding.”
