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Legal & General Ignite: Market activity robust in March but buyers’ needs remain complex

by | Apr 22, 2024

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The latest data from Legal & General Ignite, the free mortgage research and sourcing platform, shows that UK mortgage market activity remained robust throughout March despite ongoing economic headwinds. This was driven by resilient pockets of demand, particularly regarding complex borrowing requirements. 

Strong pockets of demand

The three most used search terms – ‘Visa’ (1st), ‘default satisfied’ (2nd), and ‘first-time buyer’ (3rd) – retain their positions from the beginning of the year. Throughout March, broker searches for ‘maximum age’ grew by 6% and became a top 4 search term (up from 9th in February). 

 
 

In a similar vein, demand for ‘shared ownership’ and ‘joint borrower sole proprietor’ products remained robust, with the search terms ranking 11th and 12th in March. The support of family and friends remains integral to the first-time buyer market – last year, Legal & General research revealed that the Bank of Family was set to give £8.1 billion to homebuyers in 2023 alone, and support just under half (47%) of all homes purchased by buyers under the age of 55. 


However, on the other side of the coin, searches on behalf of homeowners seeking a 2nd residential home grew by 7% in March. This comes despite the announcement in the recent Spring Budget (6th March) that the higher rate of property capital gains tax will be reduced from 28 per cent to 24 per cent to encourage more sales of 2nd residential properties. 

Demand for interest-only products falls sharply amidst stabilising rates

 

Economic challenges have created more complex borrower requirements and circumstances throughout the past three years. However, the latest data indicates that this complexity is changing, with searches for those with a ‘debt management plan’ shrinking by 21%. 

Searches for interest-only products also fell by 8% from February to March. Demand for these products spiked mid-2023, with searches jumping by 11% from June to July, but this has since fallen due to stabilising swap and interest rates. Despite this decline, complexity continues to shape the market, with ‘county court judgment satisfied’ and ‘minimum period of employment’ remaining in the top 20 most used criteria in March, alongside ‘interest-only’.

Jodie White, Head of Mortgage Products & Transformation, Legal & General Mortgage Services: “While the mortgage market isn’t entirely out of the woods, the March data gives good reason to be cautiously optimistic. Overall, activity remains robust, and searches for some of the more concerning criteria searches (such as debt management plans) are starting to drop. The stabilisation of swap and interest rates has played a big part in this – while the average fixed rate Buy to Let product was priced at 6.88% in August, it now sits at a much lower 5.52% according to Moneyfacts.

 
 

“With so many moving parts contributing to this complex market, being equipped with the optimum tech tools is not just advantageous but essential. 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.”

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