"Moving further into 2022, we appear to be entering another phase for the sector, as we leave behind the rock-bottom rates that have dominated the market for so long."
The data shows that the mortgage market staged a strong return in terms of prices and transactions levels during the pandemic, evidenced by an annual growth of 66% in overall searches by the end of 2021.
Amid the stamp duty holiday rush, searches on behalf of first-time buyers climbed by 64% over 2021.
The stamp duty holiday, combined with the savings accrued by some during the UK’s various lockdowns, spiked considerable interest in the market amongst first-time buyers. According to the SmartrCriteria tool, ‘first-time buyers’ were the third-most searched criteria point in 2020; a trend that carried through to the next year, when the term ranked fourth.
The tax break also piqued the interest of foreign buyers, with searches for borrowers with visas dominating as the most-searched criteria point in 2020 and 2021.
The rise of the staycation means searches for holiday lets grew by 25% in 2021. Two summers of restrictions on foreign holidays created considerable demand for staycation properties, as many chose to holiday in the UK rather than travelling abroad. The SmartrCriteria data shows that ‘holiday lets’ was the third most searched term among advisers in 2020, up from 2019 when it did not even feature in the top 10.
Appetite for these properties extended into last year, with searches for holiday lets climbing by 25% in 2021, though the search term fell to the eighth most popular spot.
Clare Beardmore, head of broker and propositions at L&G Mortgage Club, said: “As we mark the third anniversary of the SmartrCriteria tool, the data it provides shows how much the market has changed over the last few years. The ongoing impact of the pandemic has been undeniable, re-shaping the types of property that buyers look for, and prompting a number of government initiatives that have seen market activity and house prices both surge.
“Moving further into 2022, we appear to be entering another phase for the sector, as we leave behind the rock-bottom rates that have dominated the market for so long. Just as we face further potential rate increases, many homeowners and prospective buyers have seen their household finances take a knock, with high energy prices and rising inflation driving a surge in the cost of living. SmartrCriteria data from December 2021 has already shown an 8% increase in searches around ‘payday loans’ and there will likely be further financial pressure on borrowers still to come.
“While we await our January 2022 data, we can look ahead to what this new year might bring. The current squeeze on affordability and uncertainty on future rates has the potential to shift borrowers’ preferences towards the comfort of a longer-term fixed rate product, or drive searches for interest-only mortgages that minimise monthly outgoings. Looking back on the profound change of the last three years though, it’s difficult to give any confident prediction around what we might face over the rest of 2022.”
