Analysis from finance technology company Twenty7tec shows a 3.95% rise in searches for residential mortgages in Q2, which the company says demonstrates a strong overall market.
The total number of movers and remortgagers looking for new products is at odds with the first-time buyer market, with searches from those seeking to get on the property ladder falling by 6.37% over the same period. The drop can be attributed to buyers rushing to complete before stamp duty changes took effect, Twenty7tec director Nathan Reilly said.
However, the wider market is being driven by those already on the property ladder who have been unaffected by the changes in thresholds. The nil-rate threshold reverting to £300,000 has also been attributed to the number of first-time buyers taking out loan-to-value products of 90% or more, which has now reached 49.48%.
‘While high LTV products are nothing new, this level of reliance points to the mounting pressures buyers face when trying to get on the ladder’, Reilly said.
Affordability issues may also be behind the rise in the number of searches for mortgage deals under two years – up from 41% in Q1 to 46.5% in Q2 – as more borrowers opted for short-term products ‘likely expecting interest rates to fall in the coming years’.
Overall 90%+ loan-to-value borrowing rose from 21.88% to 22.17%, indicating more buyers are stretching their deposits due to affordability pressures.
Reilly concluded:
“Stamp duty changes never happen in isolation. They ripple through the market, affecting behaviour, affordability, and product choice. Advisers will need to continue guiding clients through these shifts as policy and economic conditions evolve.”
