Released on: October 4, 2008, 12:53 am

Press Release Author: Joe Wiggins

Industry: Real Estate

Press Release Summary: Legal & General’s third report in the ‘Mortgage Purchase
Index’ series analyses trends from over 19,000 mortgage applications made in the
last quarter.

Press Release Body: 29/09/2008 09:35
Legal & General’s third report in the ‘Mortgage Purchase Index’ series analyses
trends from over 19,000 mortgage applications made in the last quarter.
Q3 Key Findings:
• 35% of residential borrowers took variable rate mortgages over the past three
months, up from 24% last quarter
• However, residential borrowers still prefer fixed rates overall - 63% took fixed
rates, down from 75% last quarter
• Buy-to-let borrowers prefer variable rates – 55% took this type of mortgage vs.
43% on fixed rates
• The average residential mortgage was just 60% loan-to-value over the past quarter
• Two year fixed rates have become cheaper, but three, five and ten year products
more expensive.
Stephen Smith, Director of Housing at Legal & General said: “As suspected, the
popularity of fixed rate mortgages peaked last quarter when we found that
three-quarters of borrowers were taking this type of mortgage, compared to 63% in
Q3. Trackers will have attracted greater attention as forecasts of base rate cuts
become more prominent. The popularity of variable rates has also perhaps been
boosted by the number of borrowers sticking with their lender’s standard variable
rate when they came to the end of a deal rather than remortgaging straight away.
This approach of sitting on the fence is a sign of the times and would have been
unheard of a year or so ago. Fixed rates over the past three months have been
‘expensive’ compared to the beginning of the year, although two-year deals have
dropped somewhat recently.
“The average residential borrower has been able to put up a 40% deposit, which
indicates that whilst there are many people with healthy levels of debt, there are
now far fewer mortgages being offered with high LTVs. This has lead to the average
LTV for residential borrowers falling throughout the year. On the other hand, the
average LTV for buy-to-let borrowers has risen from 67% to 73%, showing that
cash-rich landlords are taking advantage of the increasing demand for rental
accommodation.”
Notes to Editors:

About Legal and General

• The Legal & General Group, established in 1836, is one of the UK’s leading
financial services companies.
• We are one of the UK’s top 50 companies in the FTSE 100 Index.
• Over 5.75 million people rely on us for life assurance, pensions, investments, and
general insurance plans.
• The Legal & General Group is responsible for investing over £301 billion worldwide
(as at 31 December 2007) on behalf of investors, policyholders and institutions.
• Legal & General is one of the biggest providers of index-tracking investments in
the UK, managing over £214 billion as at 31 December 2007.
• We have operations in the USA, France, the Netherlands and Germany, as well as the
UK.
Data based on 19,140 mortgage applications through the Legal & General Mortgage Club
from June to August 2008.

For more information contact:


Joe Wiggins
PR Manager Protection and Housing
t:01737 375 351
m:07841 366 145
f:01737 374 275
e: joe.wiggins@landg.com

The Publicity Team
Legal & General House
Kingswood
Tadworth
Surrey KT20 6EU


Web Site: http://www.legalandgeneral.com/pensions

Contact Details: Legal & General House
Kingswood
Tadworth
Surrey KT20 6EU
01737 375 351
joe.wiggins@landg.com