There has been a notable rise in searches for interest-only mortgages, following the announcement of the Mortgage Charter in late June.
Searches for ‘interest-only’ mortgage products increased by 11% from June to July, following a 53% rise from May to June. This spike coincides with the announcement of the Mortgage Charter by the chancellor, Jeremy Hunt, on Monday 26th June to support borrowers struggling to meet mortgage repayments.
Under the new Mortgage 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 9% in July. Meanwhile, searches for mortgage products that consider a property’s EPC ratings soared by 38% (following a 15% 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%, with some seeking cheaper ‘first-stepper’ properties due to rising interest rates.
Additionally, the July data, provided by Legal & General Ignite, 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% in July, following a 15% drop in June and considerable 28% uptick in May. Elsewhere, searches from expats not in the UK also dropped by 9% in July.
