Mortgage market activity strong despite economic headwinds

Mortgage lender

Economic challenges have created more complex borrower requirements and circumstances throughout the last three years

UK mortgage market activity stayed resilient throughout March despite ongoing economic headwinds, driven by strong pockets of demand, especially regarding complex borrowing requirements, according to the latest data from Legal & General Ignite.

The three most used search terms – ‘visa’, ‘default satisfied’ and ‘first-time buyer’ – retain their positions from the beginning of the year. Throughout March, broker searches for ‘maximum age’ rose by 6% and became a top 4 search term, up from ninth in February.

In a similar vein, demand for ‘shared ownership’ and ‘joint borrower sole proprietor’ products remained strong, with the search terms ranking 11th and 12th in March. Last year, Legal & General research found that the Bank of Family was set to give £8.1 billion to homebuyers in 2023 alone, and support just below half (47%) of all homes bought by buyers below the age of 55.

Nevertheless, on the other side of the coin, searches on behalf of homeowners seeking a second residential home rose by 7% in March. This comes despite the announcement in the recent Spring Budget that the higher rate of property CGT will be lowered from 28% to 24% to encourage more sales of second residential properties.

Economic challenges have created more complex borrower requirements and circumstances throughout the last three years. Nevertheless, the latest data suggests that this complexity is changing, with searches for those with a debt management plan reducing by 21%.

Jodie White, head of mortgage products and transformation at L&G Mortgage Services, said: While the mortgage market is not entirely out of the woods, the March data gives good reason to be cautiously optimistic. Overall, activity remains strong, and searches for some of the more concerning criteria searches (such as debt management plans) are starting to decline. The stabilisation of swap and interest rates has played a big part in this – while the average fixed rate BTL product was priced at 6.88% in August, it now stands at a much lower 5.52% per Moneyfacts.

With so many moving parts contributing to this complex market, being equipped with the optimum tech tools is not just advantageous but necessary, she added. At Legal & General, we continue to invest in our tools, talent, and processes to help to streamline and optimise decision-making for our valued broker and lender partners.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Getting Money Wise. The information provided on Getting Money Wise is intended for informational purposes only. Getting Money Wise is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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