L&G: Capital raising mortgages continue to rise

Jake Carter

October 15, 2021

Searches for capital raising mortgages continued to dominate in August and September, rising by 18% overall, according to Legal & General Mortgage Club’s SmartrCriteria tool.

As such, a capital raising mortgage was the second most sought after criteria point in September, rising from sixth place in August.

Demand for lenders willing to consider applicants with credit impairments continued to fall month-on-month throughout Q3. In August, the SmartrCriteria tool recorded a 9% decrease in demand for products suitable for borrowers with debt management plans and 8% fall in those for customers with unsecured arrears.

Searches on behalf of borrowers with unsatisfied defaults and those employed via contract work also fell by 9% and 8% respectively. In September, demand for products suited to borrowers with satisfied defaults and unsecured arrears fell by a further 10% and 7%.

The SmartrCriteria tool also revealed that searches made on behalf of international buyers grew by 160% in August. This was consistent with a 107% jump in searches conducted for international buyers with a visa.

The rise in interest from international buyers has coincided with easing international travel restrictions and slowing domestic purchase activity in the wake of the end of the stamp duty holiday.

The data also shows that Visa-friendly mortgage criteria remained the most searched metric in July, August and September and the SmartrCriteria tool recorded a 4% rise in demand for shared ownership products in September.

And September also saw searches on behalf of borrowers who remortgaged or purchased their property less than six months ago grow by 13%.

Kevin Roberts, director of Legal & General Mortgage Club, said: “It is reassuring to see a wide range of factors driving demand in the mortgage market, especially in light of the Stamp Duty holiday ending. However, the crisis has in many cases complicated applicants’ financial circumstances and advisers must keep this front of mind.

“Against this complex backdrop, the value of both mortgage advice and technology remains clear. Advisers will need to embrace technology to automate processes such as affordability calculations and other administrative tasks, to usher in efficiency gains and feel confident in tackling these intricate cases.

“With purchase activity expected to return to its pre-pandemic level in the coming months, in light of the end of the Stamp Duty holiday, now is the time to invest in mortgage technology and prepare for this new and exciting era of the market.”

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