Cost of living crisis triggers wildly diverse Mortgage product demand

New data from Legal & General - based on searches to its Ignite platform - suggests a diverse mortgage market during the current cost of living crisis.

It says that while demand from some cohorts has fallen, such as those searching for minimum period of employment dropping by two per cent.  first-time buyer activity remains particularly resilient.

Searches for first-time buyers, first-time landlords, and non-owner occupiers grew by 13 per cent in October, retaining its spot as the fourth most popular criteria used. 

‘Joint Borrower-Sole Proprietor' has emerged as the second most popular search term in October, with searches growing by seven per cent month-on-month. 

It is clear that reliance on wider support remains commonplace with first-time buyer enquiries, with searches for ‘gifted equity/concessionary purchases’ growing by eight per cent in the same period.

A reliance on the generosity of family and friends - the ‘Bank of Family’ - has been revealed in a separate Legal & General analysis showing that lending from this source has risen by 56 per cent in the last seven years. 

Families are set to support 47 per cent of all homes purchased by buyers under the age of 55 this year.

Searches for borrowers with unsecured arrears, missed mortgage payments, and unsatisfied defaults each rose by 16, four and two per cent respectively.

Elsewhere, searches on behalf of borrowers with unsatisfied county court judgements rose by 30 per cent.

In a reflection of the challenging economic climate, demand for capital-raising mortgages continues to rise, with searches growing by 15 per cent in October to become the third most popular criteria used on Ignite.

Looking to the wider market, applicants with a VISA also continue to make their mark in the UK mortgage market – with ‘VISA’ remaining the most used criteria in October. Searches related to 'Limited company buy to let' and 'Limited company income figures' have also both experienced growth throughout October, with increases of 18 and 10 per cent respectively.

Jodie White of Legal & General comments: “It is fantastic to see advisers going above and beyond to find innovative routes to homeownership for buyers in response to the economic challenges. In particular, it is great to see searches on behalf of first-time buyers leading the way, with the Bank of Family of course maintaining a significant role in this. 

“With advisers contending with complex client needs and circumstances, as well as the wider economic backdrop, it is vitally important that they are armed with the tech tools that the industry has to offer. 

“At Legal & General, we continue to prioritise investment in this area, welcoming a wide range of lenders and products to Legal & General Ignite, alongside new functionality. We are passionate about saving advisers crucial time through good quality tech, that they can reinvest into the most important area; customer communication.”