Mortgage borrowers are cautious about their next steps due to geopolitical, cost-of-living and affordability issues, brokers say.
The Family Building Society’s six-monthly Intermediary Business Outlook Survey found that most brokers (51%) said they had seen a rise in remortgage applications, but the same percentage had experienced a drop in applications for home moves.
Alistair Nimmo, director of marketing at Family Building Society, said: “It is clear the longer geopolitical tensions persist, the more likely homeowners are going to put on hold any plans to move on, while first-time buyers are as reliant on family support as in the past.”
Two-year mortgages preferred
With rates rising due to geopolitical tensions, 71% of brokers surveyed said there had been a rise in borrowers opting to take out two-year fixed loans rather than five-year deals.
“The move towards two-year fixed mortgages shows that borrowers do not want to be tied into higher rates in the longer term and are hoping the market will return to the relatively lower rates seen in the recent past,” Nimmo added.
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This echoes recent figures from Stonebridge that found that the market share for two-year fixes jumped from 51.6% to 65.2% of all home loans in just one year.
Family help needed
Brokers said during the next six months, low-income households, first-time buyers and the self-employed were most at risk of affordability constraints. The desire to buy is as strong as ever, however, and many are prioritising this with family help.
Among broker comments compiled by the survey were: “Owning a home is a popular life goal for many young people. They see influencers with their own home and want the same” and “Parents are keen to get their children on the property ladder and are helping with deposits.”
Well over half (59%) of respondents noticed an increase in enquiries where family members want to support the mortgage or help with moving costs.