The latest data from Twenty7Tec shows a significant rebound in mortgage activity
Following the expected fall in mortgage market activity during lockdown the latest data from Twenty7Tec shows a significant rebound.
In their June edition of Supply & Demand in the Mortgage Market, CEO James Tucker identifies the start of the “V” shape recovery in the purchase market.
The comparisons between May and June are stark; mortgage searches are up a minimum of 60% for properties of all prices, with a welcome bounceback in the First Time Buyer market which now represents just under a fifth of mortgage searches in June, compared to 13% in May.
According to Nathan Reilly: June was all about the return of the First Time Buyer. In the lows of lockdown, we saw lows of 6.58% of FTB mortgage searches. They’d been priced or de-risked out of the market as lenders sought to adjust their risk profiles and products to match. Now, they are back with something of a vengeance, which is essential for a fully functioning housing market and a housing-sector-led recovery.
The data shows a rise in demand across all property values, but also identifies a mismatch of demand and supply for mortgage products where 2.5% of products available are in the 90-95% LTV range.
The numbers include indications of a growing interest in Buy to Let, potentially in anticipation of a stimulus in the market in form of SDLT changes, up 48% in June against May’s figures, and a big swing back from remortgage to purchase searches.
Phil Bailey of Twenty7Tec comments: “Remortgages were almost the only game in town during lockdown, at one point representing 75% of the total mortgage searches. The year-to-date graph shows us how much the pendulum swung towards remortgages, and how much it has swung back since. Purchase searches are now ahead of long-term averages. June saw 63.8% of all searches being for purchase – against a long-term average of around 55-60%. Cautiously, we’d ask if it has now plateaued at the end of June?”
At present, there is cautious optimism as practitioners report record breaking instruction volumes and consistency in work volume post-lockdown.
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