Latest Mortgage Data Shows Promising “V” Recovery

Following the expected fall in mortgage market activity during lockdown the latest data from Twenty7Tec show a significant rebound.

In their June edition of Supply & Demand in the Mortgage Market, CEO James Tucker identifies the start of the “V” shape recovery in the purchase market.

The comparisons between May and June are stark; mortgage searches are up a minimum of 60% for properties of all prices, with a welcome bounceback in the First Time Buyer market which now represents just under a fifth of mortgage searches in June, compared to 13% in May.

According to Nathan Reilly:

“June was all about the return of the First Time Buyer. In the lows of lockdown, we saw lows of 6.58% of FTB mortgage searches. They’d been priced or de-risked out of the market as lenders sought to adjust their risk profiles and products to match. Now, they are back with something of a vengeance, which is essential for a fully functioning housing market and a housing-sector-led recovery.”

The data shows a rise in demand across all property values, but also identifies a mismatch of demand and supply for mortgage products where 2.5% of products available are in the 90-95% LTV range, whereas, 16.4% of all searches are here

The numbers include indications of a growing interest in Buy to Let, potentially in anticipation of a stimulus in the market in form of SDLT changes, up 48% in June against May’s figures, and a big swing back from remortgage to purchase searches.

Phil Bailey of Twenty7Tec comments:

“Remortgages were almost the only game in town during lockdown, at one point representing 75% of the total mortgage searches. The year-to-date graph shows us how much the pendulum swung towards remortgages, and how much it has swung back since. Purchase searches are now ahead of long-term averages. June saw 63.8% of all searches being for purchase – against a long-term average of around 55-60%. Cautiously, we’d ask if it has now plateaued at the end of June?”

Time will tell what the future of the property market holds, but there is cautious optimism as practitioners report record breaking instruction volumes and consistency in work volume post-lockdown.

Supply & Demand in the Mortgage Market can be viewed in full here

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