"Criteria searches for gifted deposits, gifted equity, and more, continue to dominate our Ignite results, further highlighting the prominent role that family contributions play in supporting the UK’s housing system."
Borrowers increasingly relied on gifts from their loved ones to get on the property ladder in August, according to the latest data from Legal & General Ignite.
The data shows that searches for those using gifted deposits climbed by 35% and searches on behalf of borrowers using gifted equity or making a concessionary purchase rose by 75%.
L&G’s recent Bank of Family research found that 77% of buyers receiving family assistance directed at least a portion of their funding towards a deposit. Buyers’ heavy reliance on family contributions is also highlighted in searches for guarantor/family assist increasing by 15% in August.
Other buyers opted for low-deposit paths to homeownership with searches for shared ownership schemes rising by 11% in August.
Elsewhere, searches on behalf of portfolio landlords climbed by 22% from July to August as buy-to-let investors looked to expand their businesses. Other landlords used financial support to enter the market, as searches for landlord/vendor gifted equity jumped by 18% in August. Additionally, searches for holiday let/AirBnB rose by 22% last month as landlords continued to capitalise on the pandemic-fuelled demand for staycations.
Additionally, the August data confirms that ‘visa’ continues to be the most popular criteria used by advisers searching on behalf of clients. Searches on behalf of expats not in the UK and overseas customers climbed by 17% and 21% respectively, showing that foreign buyers are still looking to snap up UK property.
With Help to Buy coming to a close, specialist lending also propped up the market in August as many borrowers considered alternative avenues. Searches for discounted market sale increased by 69% in August and searches for joint borrower-sole proprietor were the third most popular criteria.
Jodie White, head of mortgage products and transformation at Legal & General Technology, commented: “Family gifting has been a common element of the homebuying process for some time now, and our data continues to tell this story, alongside Legal & General’s own ‘Bank of Family’ research. Criteria searches for gifted deposits, gifted equity, and more, continue to dominate our Ignite results, further highlighting the prominent role that family contributions play in supporting the UK’s housing system. At the same time, it's clear that buyers are also relying on specialist products and alternative schemes that make it more achievable to get on the housing ladder amid the ongoing cost-of-living crisis.
“During what is continuing to be a financially challenging period for many, it's critical that advisers adopt innovative technologies to effectively handle the demand for advice across a wide range of sectors. Advice is critical right now, and advisers have a key role to play in helping buyers access a comprehensive range of options that aligns with their financial needs.”
