Looking at the search data for December, there is evidence of continuing volatility in the mortgage market. Nonetheless, it is possible to identify some longer-term trends in the bridging and commercial markets.
Over the last three months of 2019, searches for regulated bridging have swapped places at the top of the list with searches for the minimum loan amount. This seems to suggest that brokers are looking at bridging even on lower-value properties or for clients who are able to put up significant sums. That said, ‘maximum LTV’ also features strongly, showing it is still a priority for many borrowers to access the maximum they can.
There has been a large increase in the search for ‘second charge bridging loans’, appearing as the third-most searched for term. This is the first time brokers have searched for this in such numbers. This possibly follows the trend of bridging borrowers wanting to borrow the maximum they can and may indicate the start of a trend for this type of loan.
- B&C roundtable: Is the second charge bridging market growing?
- Knowledge Bank: broker criteria searches show mortgage market volatility
- Minimum loan amount takes top spot in bridging category
An alternative explanation could be that borrowers were looking to release additional cash on a short-term basis, perhaps as Christmas expenses mount along with looming tax bills — or, more positively, as a result of a decisive general election result giving them the confidence to invest more. We will definitely keep an eye on whether this was a one-off blip or the start of something more.
In the commercial market, the most popular search remains borrowing on semi-commercial properties — and it’s likely to remain that way while the buy-to-let tax rules remain as punitive as they currently are.
This is backed up by the search for commercial investment mortgages, as the residential BTL tax rules are clearly driving the savvy investor towards the commercial market. It will be interesting to see if this changes during the course of the year, as the government has made it clear it intends to go through with further changes to the BTL tax regime.
What was interesting in the commercial market was the number of searches for ‘commercial owner-occupier’ mortgages. This shines a light on an increase in business owners looking to purchase their business premises rather than renting. This could indicate a rise in confidence that their businesses will be around for the medium to long term. This would be a very positive insight into business sentiment.
Maximum LTV also remained a frequent search in the commercial market, again reflecting the search for maximum borrowing against any given property.
Overall, the picture remains encouraging with strong demand for borrowing for investment purposes, and the sector in healthy shape as we head into the 2020s.