Mortgage market remaining resistant despite talk of recession

The findings of a new report into the mortgage market have painted the picture of a market that is refusing to die down despite the distress placed upon prospective homebuyers’ pockets amidst the current economic climate.

The report, which came from mortgage technology provider Twenty7Tec, looked into the mortgage market during August.

It found that August 2022 was the third-busiest month of the year for total mortgage searches, with activity up 21.49% on 12 months beforehand.

August was also the second busiest month ever for ESIS (European Standardised Information Sheet) documents, and 4th August was the highest ever day for total ESIS documents produced.

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The report also noted that the number of products available at a maximum LTV of 95% is now 6.18%, up from 5.73% in July, with Twenty7Tec’s Nathan Reilly adding that “products in the 85%+ range now make up a greater percentage of the market than for some time”.

All is not, however, rosy. The number of mortgage searches accounted for by first-time buyers was 18.2%, marking the lowest proportion this year to date.

Total mortgage searches accounted for by the platform were also down by 4.8%, though they remain significantly higher than the number seen in June.

What’s more, the month saw an 11.52% drop in products available this month, down to the lowest product availability since 23rd July 2021.

“The front end of August was among the busiest of months we’ve ever seen. The latter half was definitely affected by the summer holidays and by the bank holiday weekend,” said James Tucker, founder and CEO of Twenty7Tec. He continued:

“Away from the headline figures, however, it’s a very nuanced market. remortgages and buy-to-let activity were high, but First Time Buyer, Purchase and £1m+ property searches were all down.

The major story of the month has to be product availability, including a 26% drop in products with max LTV of 60% – a key component of the buy-to-let market and a move that surely drove some of the extra search activity.

Normally, we’d be expecting a back-to-school vibe this week, with the 14 weeks from the beginning of September to the run-up to Christmas being the busiest of the year. But if I have learned anything from the past couple of years, it’s that it’s easier to comment on what has come than what is to come. Either way, we’ll be here to support you in advising your customers on getting the best possible deal in a rapidly changing market.”

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