FTB enquiries surge as market continues to cool

First-time buyer enquiries jumped by 22% between February and March, becoming the second most popular search term overall for the month, according to new data from Legal & General’s SmartrFit platform.

Related topics:  house hunters,  FTB
Property | Reporter
25th April 2023
FTB 362

Legal & General data suggests that market conditions remain healthy, with the volume of total searches also rising during March - topping January and February’s figures and reaching the highest level since August 2022.

Other sections of the market also grew in March. Searches for HMO properties rose by 24.6%, suggesting that landlords are responding to rental demand and the buy-to-let market is showing signs of resilience. The single most popular mortgage criteria search for the month was made for applicants with a visa, continuing an almost six-month-long trend.

Activity levels fuelled by financial gifting

Despite this, some borrowers still remain in a more challenging financial position. Searches linked to the criteria for missed mortgage payments jumped by 24%, suggesting that recent rate rises, high inflation, and the cost of living are still weighing heavily on some existing mortgage holders.

These ongoing affordability issues have created an environment where more borrowers are leaning on financial gifting to boost their borrowing power. As such, searches made on the basis of a gifted deposit climbed by 19% as borrowers potentially looked to leverage an inheritance or financial gift to make their first step on the property ladder.

In addition, gifted equity/concessionary purchases charted in the top 20 of all searches, suggesting the later-life lending industry is an ongoing engine of activity in the mortgage market.

Green mortgages grow in popularity

Rising energy bills may have encouraged some borrowers to reduce future costs by investing in more sustainable and energy-efficient properties. Searches for products that consider a property’s energy performance certificate (EPC) increased by 8.3% in March.

Recent statistics suggest borrowers and landlords are becoming more conscious of energy efficiency.

The Rightmove Green Homes Report revealed there were 73% more green features in 2022 property listings compared to 2020, indicating that sellers are responding to an increased buyer appetite for greener properties.

Jodie White, Head of Mortgage Products & Transformation, Legal & General Technology:

“Despite gloomy predictions for the housing market in 2023, it is heartening to see that customers’ changing needs are being met with a dynamic range of highly competitive and innovative products. In particular, with green mortgages growing in popularity, advisers can use our SmartrFit tool to view property EPCs and generate certificates.

“Our data is a strong indicator that affordability is gradually improving for some. On one side of the market, first-time buyers are stepping forward to realise their homeowning dreams, but many are having to lean on gifted deposits and other forms of financial gifting to fund their purchases. There are also still signs to suggest that many people have not yet recovered from the financial hardship of the last year and are very much in need of the support of an adviser to find a product that best suits their borrowing profile.”

“When advising borrowers who are navigating a change in their finances, especially those who are finding themselves in a vulnerable position, brokers should be taking full advantage of the technology at their disposal. Open data platforms and advanced CRM software are just two of the many tools advisers can use to cut out time-consuming manual tasks so they can focus on what they do best – giving high-quality advice to those who need it the most.”

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