Data from mortgage research and sourcing platform Legal & General Ignite reveals a significant spike in searches for Interest Only products following the announcement of the Mortgage Charter in late June.
Despite a slight dip in activity – typical of the summer period – July search data confirms that mortgage market demand remains broadly robust.
Searches for ‘Interest Only’ mortgage products jumped by 11 per cent from June to July, following a 53 per cent increase from May to June. This spike coincides with the announcement of the Charter by Chancellor Jeremy Hunt on June 26 to support borrowers struggling to meet repayments.
Under the Charter borrowers can contact their lender to discuss alternative options without it affecting their credit score, switch rates up to six months ahead of their current rate expiring and opt to only pay the interest due for a six-month period.
Additionally, searches for non-traditional construction properties grew by nine per cent in July. Meanwhile, searches for mortgage products that consider a property’s EPC ratings soared by 38 per cent - and that followed a 15 per cent rise in June.
This growing interest could be an indication of the increasing influence of the green agenda, as well as the heightened focus on household bills amidst the ongoing cost-of-living crisis.
Searches on behalf of borrowers seeking the lowest minimum loan amount also leapt by 35 per cent, with some seeking cheaper ‘first-stepper’ properties due to rising interest rates.
Additionally, the July data confirms ‘visa’ as the most popular criteria used by advisers searching on behalf of clients. This has held the top spot since October.
Searches on behalf of borrowers with a visa softened marginally by 3.89 per cent in July, following a 15 per cent drop in June and considerable 28 per cent uptick in May. Elsewhere, searches from expats not in the UK also dropped by nine per cent in July.
Overall, the number of mortgage searches completed by Legal & General Ignite users did fall marginally from June to July, as expected in summer.
This included searches for Joint Borrower Sole Proprietor and Self-Build mortgages dipping by three and four per cent respectively.