In March, borrowers continued to rely on their loved ones to boost their borrowing power, according to new research from Legal & General Mortgage Club’s SmartrCriteria tool.
Searches for homeowners looking for joint borrower sole proprietor (JBSP) mortgages climbed by 17% in March, suggesting that borrowers are relying on financial support. Activity in the buy-to-let market reinforced this trend, as searches for gifted equity on behalf of landlords jumped by 38%.
Legal & General Mortgage Club’s SmartrCriteria tool tracks product searches from over 8,000 advisers, shedding light on the purchase and remortgage trends witnessed by brokers across the industry.
The vlub’s data also shows that demand from buyers continued despite rising living costs and soaring house prices, especially in the holiday let sector. Searches for holiday lets grew by 24% in March, implying that the sector is primed for continued growth following the boom in staycations that was sparked by the pandemic. The buy-to-let market also exhibited strong demand as first-time landlords drove activity, with searches rising by 23%.
Mortgage searches on behalf of borrowers with complex finances continued to grow between February and March. The SmartrCriteria data found that searches by advisers for lenders willing to accept borrowers with an unsatisfied default rose by 46% over the last month. Searches for lenders that ignore communications defaults, such as missed telephone bills, also grew by 65% in March.
In a similar vein, searches on behalf of those with unsecured arrears and missed mortgage payments increased by 18% and 26% respectively. This data comes as households across the UK experience a surge in the cost of living, with soaring energy bills making it harder for consumers to meet their monthly outgoings.
Clare Beardmore, head of broker and propositions, Legal & General Mortgage Club, said: “With inflation taking its toll on household expenses, the latest findings of our SmartrCriteria tool reinforce the need for advice, as borrowers look to find a mortgage that suits their changing circumstances. The current squeeze may be denting affordability, and, in turn, prompting borrowers to rely on financial support from their loved ones to minimise their borrowing costs. Meanwhile, certain borrowers with more complex circumstances are looking to get on the property ladder, or refinance following the pandemic, and will need the guidance of advisers to find alternative mortgage solutions.
“When assisting borrowers in their mortgage search journey, technology has a critical role to play. Research tools help advisers match those more complex cases and ensure that borrowers with a wide range of needs are able to secure a place on the property ladder. In addition, the business case for adopting additional technological capabilities is hard to argue. Technology limits advisers’ administrative burden and allows them to focus on what they do best – sharing valuable advice with their client base.”
