In the three weeks following the Budget, mortgage enquiries on Experian’s mortgage comparison service also increased, by 13.5 percent, as searches progressed to formal applications. Of these, house purchase leads make up a higher proportion of searches compared to remortgages, demonstrating further the impact of the extension to the stamp duty holiday.
Analysis of data over a four-week period shows mortgage applications rose the most in the week beginning March 7, 2021 – up eight percent over the previous week.
The research shows the growth is being fuelled by those under the age of 30, with mortgage applications increasing by 4.2 percent among this age group in the first two weeks of March this year, compared with the last two weeks of February 2021.
Clive Lawson, Managing Director of Experian Consumer Services, said: “Interest in home ownership continues to rise as the stamp duty holiday extension allows consumers to put down larger deposits.
“The return of Government-backed 95 percent mortgages could also help more people realise the dream of buying a home, especially young homebuyers.
“With mortgage options continuing to steadily increase, it’s important to use a broker and eligibility services, especially for higher loan-to-value ratios, so you get the product that’s best for you.
“People with high scores tend to be able to access the best mortgage rates, so it’s worth taking some time to make sure your credit score is in the best possible shape too.”
Amid the surge in demand, which Experian has said is “through the roof”, what tips are out there for those wanting to secure a mortgage deal?
Not only can moving up a credit score band have an impact on mortgage savings, but it can effect mortgage application approvals too, Experian has warned.
According to the credit reference agency’s data, a person who improves their Experian score band from Very Poor to Fair, they could save an average of £1,032 per year on a £150,000 mortgage loan with a 20 year-term, as they would likely be paying a lower interest rate.
For those hoping to get on the property ladder in the future, Experian has shared some top tips for saving and getting into the position to apply for a mortgage.
And, one of the suggestions relates to the applicant’s savings accounts.
Sort your savings accounts
“The Government has a number of savings schemes including the Lifetime ISA and Help to Buy: Shared ownership that should be explored,” Experian said.
“It’s always best to research your savings account options to make sure you’re getting every possible penny of interest in line with the Bank of England’s interest rate.”
Know your credit score
“Understanding your credit score, what it is and how it could be improved is the first step to ensuring you are in the best possible position to apply for a mortgage,” Experian said.
“The higher your credit score, the better your chances of being accepted for a mortgage, at the best rates.”
Check your report and ask for any errors to be corrected
“Looking at your credit report will help you to see what is impacting your credit score.
“They generally cover the past six years and so the sooner you are able to take control of your finances and make sure any problems you might have faced in the past (such as paying bills on time) have been sorted, the better.
“If you’re applying for a mortgage, it’s a good idea to check your credit report as early as possible. Ideally, at least two months before you apply.
“If you find any errors, ask for them to be corrected.
“A single late payment can wipe 130 points off your Experian Credit Score. Make sure your report reflects the facts.”
Try to avoid new debt in the run up to applying for a mortgage
“Try not to max out your credit card or use your entire overdraft, as lenders may think you’re in financial difficulty.
“Equally, applying for credit too often can lower your score, as each application is marked even if you’re not approved.
“This is called a hard search as lenders can see your application, so try to only apply for credit you’re eligible for.”
See if you can boost your credit score
“Experian has launched its new free service, Experian Boost, which could instantly improve your score by volunteering more information about how you manage your money.
“It works by taking into consideration everyday payments to digital entertainment services, like Netflix and Spotify, and includes regular payments to things like council tax and savings.
“Your score won’t go down when you sign up – and if you don’t get a boost immediately, stay connected as your score could increase overtime.”