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Mortgage Application Surge Suggests Green Shoots in Housing Market

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Online mortgage broker Trussle reveals its insights over the last two months and shares some top tips for navigating the mortgage market over the coming months

Two months after the housing market was given the green light to restart, activity appears to have restarted right across the sector. Whether it’s a breakout bid to leave the big cities and head to the country (which a quarter of UK adults are considering) or a fast and furious race to take advantage of some of the best mortgage deals the UK has seen for decades; there’s no doubt about it, it’s a busy and turbulent time.

Appetite for Mortgages

Trussle has reported a 182% increase in first-time buyer mortgage applications and a 176% increase in next-time buyer applications over the last two months, in comparison to the two months previously. Additionally, sign up enquiries have increased by 35%, with house buyers keen to seek out the best possible rates. For some, it’s a good time to remortgage. Trussle has found that customers save £334 on average per month by remortgaging onto a fixed rate, so it’s worth using a remortgage calculator to see if switching could save you money.

First Time Buyers

Latest figures from Trussle have shown it’s first-time buyers (FTB) who are being hit the hardest. The volume of FTBs being disqualified due to high loan-to-value (LTV) is 7 times higher than the previous period, which makes getting on the property ladder more challenging.

Trussle saw a 182%  increase in FTB applications in the two months following the property market freeze. However, there’s a very limited range of mortgage products available at the moment for borrowers with  lower deposits. This time last year there were 145 products available for buyers with a 5% deposit, whereas currently there’s only one.

Demand and Supply

Whilst it is widely recognised that the demand for house hunting is currently very high, it’s also been reported that there’s a 15% drop in housing availability compared to before the coronavirus outbreak. In order for a buoyant market to return, it’s vital we start to see an increase in house listings. Typically spring and summer are the busiest seasons in the sector, but it’s possible we may well see a revision of this in the coming months and years.

Miles Robinson, Head of Mortgages at online mortgage broker Trussle, said:

Like many other industries, the mortgage market is undoubtedly in a state of flux, with house prices fluctuating and lenders pulling mortgage products.

But, the more positive news is we’re beginning to see some green shoots. House buying has for decades been a sign of economic recovery and we believe this situation is no different. Estate agents are recording a real surge in demand for houses. Similarly, record interest rates mean there are some great deals for those who are in the right position.

However, we still need to tread carefully. Over time, we hope to see lenders add a wider variety of products to the market to make homeownership more accessible.

Any current or aspiring homeowners who are concerned about the impact of coronavirus and what it might mean for their mortgage, should seek professional advice from a broker to discuss the options available to them.