In a boost for the UK property market, a new Twenty7Tec report reveals a highly unusual spike in August mortgage searches and applications, which increased its five-year-average by an astonishing 222%.
August is usually one of the quietest months for mortgages, but proved to be among the busiest of the year - and more than double that of the average August of the past five years.
Search volumes and the volume of ESIS key facts documents prepared over July and August surpassed the year’s pre-Covid peaks in February and March: the 60 busiest days of the year for ESIS documents were all in July and August.
A key driver behind the unprecedented surge was in UK house buyers taking advantage of the sub-£500k stamp duty cut, with mortgage searches for £250k-£499k properties heavily spiked.
The Twenty7Tec Mortgage Supply & Demand Report also discovered first time buyers out in force, with Aug 14 the busiest day of the year for FTBs seeking mortgages.
James Tucker, CEO at Twenty7Tec, said: “August’s unusually high mortgage activity shows there is still much to be hopeful about in the market, and the government’s stamp duty cut has clearly ignited demand among first time buyers. August saw the single busiest day for first time buyer searches this year. Demand is there.”
“But, the Government needs to stay vigilant to support the entire market, and do their bit to stimulate the supply side as well as demand, so lenders can adjust their risk profiles and lend confidently to these first time buyers.”
“Without addressing the supply side issue, we’ll continue to have a mismatch between buyer demand and lenders who want to de-risk their lending. Simply put, without a functioning first time buyer element, the rest of the housing market doesn’t function.”
Phil Bailey, Sales Director at Twenty7Tec, commented: “Search volumes for all price brackets were down slightly on July’s performance, but August has massively outperformed expectations for demand. It’s been very interesting to see quite how positive the stamp duty effect has been on the volumes of ESIS documents that are being created.”
“One statistic that stands out is that almost two out of every five mortgage products available now is for Buy To Let. That’s well ahead of long-term averages and means that first time buyers and remortgagers are having to access a smaller pool of available products, especially in the 90%+ LTV brackets. Lender capacity is front of mind for the whole market now.”