MortgagesDec 14 2020

Adviser searches for ‘furlough-friendly’ mortgages surge

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Adviser searches for ‘furlough-friendly’ mortgages surge
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The number of searches by advisers looking for ‘furlough-friendly’ mortgages has sharply increased, according to Legal & General.

Data from the L&G Mortgage Club recorded a 230 per cent increase in searches for ‘furlough-friendly’ products between October and November, from 175 to 577 searches.

According to L&G, the number of furloughed borrowers looking to secure new mortgage finance had “skyrocketed” since the government extended the furlough scheme until the end of March.

Kevin Roberts, director at Legal & General Mortgage Club, said: “Following the Chancellor’s announcement last month confirming the government’s commitment to extend the furlough scheme, we are seeing more borrowers turn to the expertise of mortgage advisers to find furlough-friendly mortgages.”

Mr Roberts added: “Despite ongoing disruption caused by the coronavirus crisis, the mortgage market remains open to all types of borrowers. Furloughed workers still need access to mortgage products and they shouldn’t assume that their circumstances mean they are locked out of the mortgage market.”

Alex Kemp, partner at Ideal Mortgage Advisers, said: "We have seen some increase in furloughed applicants enquiring about mortgages, however not at the level we saw during the first lockdown.

"Mortgage lenders are also being more restrictive now than they were during the first lockdown and in most cases are requiring a letter from their employers with a firm return to work date, rather than just lending against furloughed income."

Separate data from criteria search system Knowledge Bank found ‘Covid-19: furloughed workers' was the second most popular search by brokers in the residential market last month.

It added that lenders had reacted quickly to the extension of the furlough scheme in November, with over 30 updates to criteria recorded in two days.

According to Knowledge Bank, most lenders tightened criteria for those who had been furloughed at any time, making it harder to purchase or remortgage.

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