Applying for mortgage financing options before the end of the stamp duty

Data from the Legal & General Mortgage Club’s SmartrCriteria tool revealed that searches for equity-raised mortgages continued to dominate in August and September, increasing 18 percent overall. As such, a capital-raising mortgage was the second most sought after criterion in September, dropping from sixth place in August.

Searches for borrowers with complex financial situations fell month-over-month in the third quarter

Demand for lenders willing to consider applicants with poor credit continued to decline month over month throughout the third quarter. In August, the SmartrCriteria tool recorded a 9 percent drop in demand for products suitable for borrowers with debt management plans and an 8 percent drop for those clients with unsecured arrears. Searches on behalf of unsatisfied defaulting borrowers and those employed on contract work also declined by 9% and 8% respectively. In September, demand for products suitable for borrowers with satisfied defaults and unsecured arrears declined further by 10% and 7%.

International demand

The SmartrCriteria tool also found that searches conducted on behalf of international buyers increased by 160% in August. This corresponded to a 107 percent increase in searches performed for international buyers with a visa. The surge in interest from international buyers has coincided with the easing of restrictions on international travel and the slowdown in domestic purchases following the end of the stamp duty holidays.

Other key findings:

• Visa-friendly mortgage criteria remained the most sought-after measure in July, August and September.
• The SmartrCriteria tool also saw a 4% increase in demand for shared ownership products in September.
• In September, searches on behalf of borrowers who remortgage or purchased their property less than 6 months ago also increased 13%.

Kevin Roberts, Director of the 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 end of the stamp duty holidays. However, the crisis has in many cases complicated the financial situation of candidates and advisers should keep this in mind.

He added: “In this complex environment, the value of mortgage advice and technology remains clear. Advisors will need to embrace technology to automate processes such as affordability calculations and other administrative tasks, to usher in efficiencies and feel confident in resolving these complex cases. With purchasing activity expected to return to its pre-pandemic level in the coming months, in light of the end of the stamp duty holidays, now is the time to invest in mortgage technology and prepare for this exciting new era of the market. “