Searches for interest only mortgages saw a 53% rise in June as borrowers looked to reduce their monthly costs, Legal & General (L&G) has found.

Using data from its Ignite platform, L&G has stated that the mortgage market remains active, despite concerns over rising rates and inflationary pressures. Particular groups, such as buy-to-let landlords and overseas buyers continuing to be a focal point, as well as property types, such as ex-council houses.

The data shows a 40% increase in the number of searches for help to buy. Despite the deadline for home purchase completions under the scheme closing at the end of May, there is strong demand for similar Government-backed schemes to tackle affordability issues.

Searches on behalf of first-time buyers increased by 14% in June, showing that there is still demand despite market volatility. However, affordability seems to still be the main barrier to first-time buyers’ homeownership aspirations.

Furthermore, searches for the purchase of ex-council houses increased by 29%. If a property is purchased under the right to buy scheme, buyers could get a 35% discount on a property’s market value if they have been a public sector tenant for between three and five years.

Head of mortgage products and transformation at L&G Technology, Jodie White, said: “It’s clear that the mortgage market remains robust despite ongoing issues with affordability, rising interest rates and stubborn inflation. It’s positive to see that market activity is still being driven by specific sectors including buy-to-let, overseas buyers, and by increased demand for particular property types.

“During this time, it’s vitally important that advisers implement new technologies to best manage demand for mortgage advice across various sectors. Advice is incredibly important right now and advisers have a crucial role to play supporting buyers and ensuring they have access to the full range of options available to them.

“The recent launch of the enhanced Legal & General Ignite platform is another step towards joining the human expertise of advisers with the power of data insights and technology. By implementing this technology across the industry, advisers will be able to save time on each case which can be spent improving customer outcomes.”

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