Thursday, October 21, 2021

Furloughed workers drops out of top searches


Despite the return of 95% LTV mortgages, affordability was still an issue for borrowers

The term ‘furloughed workers’ has dropped out of the list of top broker criteria searches for the first time since the pandemic began, according to Knowledge Bank.

It had spent more than a year among the top five most-searched terms following the first March 2020 lockdown, said the data firm’s monthly criteria tracker in May.

The survey adds, this was the first month since the health crisis began that no Covid-related searches featured, suggesting “sunnier times on the horizon as more people return to work, as it hints that we are beginning to return to normality”.

The phrase ‘maximum age at end of term’ was the most-searched criteria, as the average age of first-time buyers is now over 31, according to earlier data from Halifax.

As house prices hit record highs this year, both older and younger borrowers are extending terms to make repayments manageable, says the search specialist.

Despite the return of 95% loan to value (LTV) mortgages, affordability was still an issue for borrowers, the survey said.

It said the term ‘first-time buyers’ has been in the top five searches all year, and points to the difficulty of younger people to meet the affordability requirements of a residential mortgage.

The data firm adds, affordability is again highlighted as an issue by the term ‘income multiple used for affordability assessment’ coming in as the third most-searched term in the residential market in May.

It says: As house prices continue to accelerate, the number of borrowers looking for the maximum they can borrow against their income is set to continue growing.

‘First-time landlord’ was the most-searched-for criteria by brokers in the buy-to-let market last month. This term has been among the top two searches all year.

The data company says: This clearly demonstrates the UK populace’s love affair with owning property. Owning a BTL may well have become possible for more people as a result of increased savings due to the pandemic.

It adds, that heavily used criteria terms in the second charge market reflect the two-speed economy the UK has fallen into as a result of the health crisis, with those working from home amassing savings, while those who cannot build debts.

The firm said ‘capital raising for debt consolidation’ was the second-most searched term in the second charge market in May.

But added, there are those looking to build home-offices or extend their house which pushed ‘capital raising for home improvements’ to become the third most-searched term in this market last month.


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