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Demand for Capital Raising Mortgage Options Before Stamp Duty Ended

mortgage adviser with clients

Data from Legal & General Mortgage Club’s SmartrCriteria tool found that searches for capital raising mortgages continued to dominate in August and September, rising by 18 per cent overall. As such, a capital raising mortgage was the second most sought after criteria point in September, rising from sixth place in August.

Searches for borrowers with complex financial situations fell month-on-month in Q3

Demand for lenders willing to consider applicants with credit impairments continued to fall month-on-month throughout Q3. In August, the SmartrCriteria tool recorded a 9 per cent decrease in demand for products suitable for borrowers with debt management plans and 8 per cent fall in those for customers with unsecured arrears. Searches on behalf of borrowers with unsatisfied defaults and those employed via contract work also fell by 9 per cent and 8 per cent respectively. In September, demand for products suited to borrowers with satisfied defaults and unsecured arrears fell by a further 10 per cent and 7 per cent.

International demand

The SmartrCriteria tool also revealed that searches made on behalf of international buyers grew by 160 per cent in August. This was consistent with a 107 per cent jump in searches conducted for international buyers with a visa. The rise in interest from international buyers has coincided with easing international travel restrictions and slowing domestic purchase activity in the wake of the end of the Stamp Duty Holiday.

Other key findings:

  • Visa-friendly mortgage criteria remained the most searched metric in July, August and September.
  • The SmartrCriteria tool also recorded a 4 per cent rise in demand for Shared Ownership products in September.
  • September also saw searches on behalf of borrowers who remortgaged or purchased their property less than 6 months ago grow by 13 per cent.

Kevin Roberts, director, Legal & General Mortgage Club, said: “It is reassuring to see a wide range of factors driving demand in the mortgage market, especially in light of the Stamp Duty holiday ending. However, the crisis has in many cases complicated applicants’ financial circumstances and advisers must keep this front of mind.

He added: “Against this complex backdrop, the value of both mortgage advice and technology remains clear. Advisers will need to embrace technology to automate processes such as affordability calculations and other administrative tasks, to usher in efficiency gains and feel confident in tackling these intricate cases. With purchase activity expected to return to its pre-pandemic level in the coming months, in light of the end of the Stamp Duty holiday, now is the time to invest in mortgage technology and prepare for this new and exciting era of the market.”