UK homeowners are increasingly exploring interest-only mortgage options in an attempt to lighten their financial load. A recent surge in the search for these more manageable payment plans, along with a keen eye on employment criteria for loan eligibility, signals a significant shift in borrower behavior. Meanwhile, the UK property market continues to draw attention from a global audience, promising a diverse future for domestic and international investments alike.
The Rise in Interest-Only Inquiries
According to data from Legal & General Ignite, there’s been a notable 9% increase in homeowners hunting down interest-only mortgage products. This trend suggests a growing need for more affordable repayment methods as individuals grapple with the pressures of maintaining their lifestyle amidst economic fluctuations. Interest-only mortgages, which require borrowers to pay only the interest on the loan for a set period before repaying the capital, offer a temporary reprieve by reducing monthly outgoings.
Adding to the financial stress, there’s a 15% rise in potential borrowers scrutinising the minimum employment period required to secure a loan. This uptick could indicate a growing concern over job security and the impact it has on one’s ability to obtain financing.
Another significant shift observed is the increased interest in ‘satisfied defaults,’ which have climbed to the second most searched term. This 7% jump reflects a heightened focus on credit history and the complexities of securing a mortgage with past financial missteps.
Jodie White, head of mortgage products & transformation at Legal & General Mortgage Services, comments on the current market, noting, “There is no denying that 2023 was quieter than many had hoped, but there are already clear signs that 2024 is on much steadier footing.” She attributes this optimism to the competitive mortgage pricing initiated towards the end of last year, sparking hope for a more accessible market.
Global Eyes on UK Property
The allure of the UK property market extends far beyond its shores, continuing to attract significant interest from international buyers and investors. ‘Visa’ has remained the top criterion for searches since the year’s start, highlighting the strong connection between property investment and migration policies.
The data also reveals a 9% increase in searches conducted on behalf of expatriates not currently residing in the UK, alongside a staggering 112% surge in inquiries for buyers dependent on foreign income since December. These figures not only underscore the global appeal of the UK housing market but also suggest a growing trend of cross-border investments fueled by diverse income sources.