Despite the recent dip in demand from purchasers, first-time buyers remain highly active in the housing market, with many receiving much-needed support from guarantors as well as family assistance, according to Legal & General.
The financial services group says that it has identified signs of greater first-time activity, at a time when many existing borrowers remain in a more challenging financial position.
Searches linked to the criteria for missed mortgage payments jumped by 24%, suggesting that recent rate rises, high inflation, and the cost of living are still weighing heavily on some existing mortgage holders.
Legal & General says that these ongoing affordability issues have created an environment where more borrowers are leaning on financial gifting to boost their borrowing power. As such, searches made on the basis of a gifted deposit climbed by 19% as borrowers potentially looked to leverage an inheritance or financial gift to make their first step on the property ladder.
Jodie White, head of mortgage products & transformation, Legal & General Technology, commented: “Our data is a strong indicator that affordability is gradually improving for some.
“On one side of the market, first-time buyers are stepping forward to realise their homeowning dreams, but many are having to lean on gifted deposits and other forms of financial gifting to fund their purchase.
“There are also still signs to suggest that many people have not yet recovered from the financial hardship of the last year and are very much in need of the support of an adviser to find a product that best suits their borrowing profile.”
