Knowledge Bank monthly tracker reflects brokers concern with Covid-19 as more than 500 criteria change in 48 hours

Knowledge Bank’s monthly tracker of the criteria that brokers most search for shows the clear concern with Covid-19.

While it already seems a lifetime ago it was only the 18th March that the Chancellor, Rishi Sunak, announced a payment holiday for all homeowners in financial difficulty. Since then lenders phone lines, and clearly those to brokers, have been red hot with homeowners trying to access the payment holidays so it is no surprise therefore to discover that ‘Covid-19 Mortgage Payment Holidays’ was the most searched for term in residential mortgages and the second most searched for term in buy-to-let.

Other than the Covid-19 search it is remarkably business as usual with Maximum Age at End of Term, Interest Only and the Self Employed with One Year’s Accounts making up four of the top five most searched for residential mortgage terms. However, ‘Defaults registered in the past three years’ is at number five, but expect this to rise through the ranks over the coming months.

The announcement that landlords may also take a three-month payment holiday if their tenants experience financial difficulties was announced on the 20th March, two days after the homeowner announcement. Perhaps this lag accounts for the fact that ‘Covid-19 Mortgage Payment Holidays’ for buy-to-let only reached the second most searched for term. Lending to Limited Companies remained the most popular term for the third month running, followed by First Time Landlord and the Requirement to be a Homeowner.

Second charges, showed a new entry at number five – a search for ‘AVMs and Desktop Valuations’ – a criteria that we expect to see across every category in the coming months. While Maximum LTV stayed as the most searched for item for the fourth month in a row, this month for the first time, brokers were also searching for Minimum Loan Amounts, clearly showing a potential need to release cash at this difficult time. This was followed by Mortgage Arrears or Defaults, then Debt Management Plan which clearly shows that some people were struggling with defaults even before the Corona virus struck.

In equity release all the criteria were completely different again, leading with a top search for early repayment charges followed by partial repayments for the first time. The fluctuations in this category are the result of fewer brokers searching for equity release.

Bridging loan and commercial lending searches were not as disrupted, although with many lenders in these sectors now unable to lend, these searches may change significantly over the coming month.

The search results reflected here are from the main Knowledge Bank criteria search system. In addition to this Knowledge Bank created a free-of-charge ‘COVID-19 Criteria Live Feed’ of what lenders are doing to respond to the crisis. This was launched to provide brokers and the wider industry with a single point of reference for all criteria and policy relating to the COVID-19 situation.

This, like Knowledge Bank, is being updated by the lenders themselves in real time, as soon as they announce their policy changes.

Criteria is changing so rapidly that Knowledge Bank had almost 500 changes to criteria from 14 different lenders in 48 hours just this week.

Nicola Firth, Founder & CEO of Knowledge Bank said: “With the number of lender criteria changes increasing by the day there has never been a more important time to have subscription to a criteria search engine.

“As the UK’s largest and most comprehensive mortgage criteria search system, the industry looks to us to provide up-to-date and accurate information on lending policy. At this time of change it is important to reflect the issues and the searches that brokers are carrying out as it reflects on the market as a whole.

“The number of broker registrations and searches has increased exponentially over the past three weeks and a peek into those searches provides us with a fascinating insight. April will clearly be even more revealing as the broker searches could change more dramatically than anything we have seen to date.”