Before 2024 comes to an end, it has already overtaken last year as the busiest-ever year for mortgage searches, as borrowers continue to forge ahead within the UK property market.
The start of this year was particularly strong among borrowers searching to secure mortgages, according to the latest report from Twenty7tec, with January, February and March recording the highest figures.
Although November’s results show a slight slowdown compared with October, this could be attributed to a seasonal lull in property market activity, with renewed interest often coming back into play from January. In 2025, this could also be exacerbated by upcoming changes to stamp duty at the end of the 2024/2025 tax year.
According to the figures, the number of searches for new purchase borrowing was up by 10.39% in November, compared with the same time last year; although remortgage searches were down by 14.05%.
In the buy-to-let space, searches for purchases were also up compared with a year ago, by 0.04%, while the remortgage result for landlords was down slightly by 0.01%. This indicates that investor interest is holding steady in the UK property market.
Twenty7tec looks specifically at the residential market, too, where new purchase mortgage searches were up by the highest amount over the 12-month period, with a 12.36% rise in November.
First-time buyer appetite has also increased slightly, with a 0.45% increase, although this could be expected to ramp up when the next sets of figures come in, as a result of the Budget announcement which indicated that stamp duty for first-time buyers is set to rise in April 2025.
The broader picture for mortgages
When looking at November’s mortgage search figures compared with October, there was a decrease across all segments of the market. The biggest fall was in buy-to-let purchase searches, which were down by 14.60%, while the smallest difference was a 6.5% dip in buy-to-let remortgage searches.
However, Nathan Reilly, Director at Twenty7tec, says: “November mortgage market activity was clearly down in October 2024 pretty much across the board. But there was also a shift in the outlook of the market as there was a rather large bump (61.3%) in total fixed mortgage searches with initial terms of less than two years. That speaks to what consumers expect to happen next.
“Although activity was down in November, it should be looked at in the broader context: at around midday on November 28th, the year-to-date totals overtook mortgage searches for 2023, with over a month to spare. There’s nuance in those figures, however, as the market this year has not been as busy handling first-time buyer mortgage searches with volumes still down over 100,000 in 2023 with a month to go.”
Hike in self-employed buyers
One interesting finding from the latest report was the sharp rise in the number of self-employed borrowers (or those searching for products). In fact, 2024 was the busiest ever year for this segment of the market, with 1,223,140 searches in total so far.
This is 1.97% up on the end of 2023’s final result, with more scope for growth in the final month of this year.
The results show that all 11 months of this year have brought in more than 100,000 self-employed mortgage searches, compared with 2023’s total of five months where the numbers exceeded 100,000. In 2022, only four months saw searches go above the 100,000 mark, while prior to that the monthly search total was always lower.
While self-employed homebuyers and property investors can secure competitive mortgages, they will often use a broker to help them navigate the additional complexities that can come with being self-employed. For example, while an employed person will probably need to provide three months’ payslips, a self-employed person may need to provide two years’ of accounts to prove their earnings.
A crucial interest rate decision
The Bank of England’s next interest rate decision is due on 19th December. At the moment, analysts are divided on whether the bank will opt to hold interest rates at their current level of 4.75%, or cut it for the third time this year – or even raise the rate, but this seems unlikely.
The decision will depend on a range of factors, including whether the country’s inflation level sits. The latest figures show it is just above target at 2.3%, down from a peak of 11.1% in late 2022.
Lenders often react to this decision by shifting their borrowing rates, but they will often raise or lower rates independently of the decision based on market confidence. At the moment, lenders have begun to reduce some of their mortgage rates once more, and this could bode well for increased property market activity over the coming months.
Nathan Reilly concludes: “This year has already overtaken 2023 for the busiest-ever year for mortgage searches. The relative October and November slack have been picked up in the first quarter – with particularly strong performances in January, February and March 2024.
“It will be interesting to see if 2025 gets off to as strong a start as 2024 did. The late December interest rate decision would appear to have even more importance for the momentum for the weeks ahead.”
