Consistency is the watchword for broker’s searches in August reveals criteria tracker

As the financial world is increasingly in turmoil and the UK is gripped by the perfect storm of high inflation, a cost-of-living crisis and a changing government, brokers are steadfastly searching for lenders whose criteria will accept their clients.

Over recent months the focus for mortgage applicants has shifted from price to acceptance. As the cost-of-living increases there has been a marked impact on household budgets and subsequently lenders’ affordability calculations.

Brokers are having to work increasingly hard to place cases and research from Knowledge Bank reveals brokers most popular searches month on month as they look for a home for their client’s mortgage application.

Knowledge Bank CEO Nicola Firth said, “For a supposedly quiet month when everyone is meant to be on holiday August was one of our busiest for criteria and product changes. Lenders kept a close eye on external economic factors and how this affected a borrower’s ability to repay a loan and adjusted their criteria accordingly. The consistency of the most popular searches being performed by brokers month on month suggests that they are still trying hard to place cases and in some cases re-broking a mortgage application as lengthy completion times means mortgage offers run out. For brokers this doesn’t mean simply re-submitting the same application as their client may now fall outside of revised criteria.”

The criteria index shows that in the residential sector the most popular criteria searched for was the maximum age a borrower could be at the end of the mortgage term. This was the sixth month in a row that this was the most popular criteria searched and reinforces the view that even though interest rates still remain relatively low, borrowers are looking for the maximum length of time to repay their mortgage.

The second most popular search, once again appearing in the top five for the past six months, was brokers looking for lenders for their self-employed clients. As the self-employed market continues to grow brokers are keeping a close eye on any new restrictions imposed on their self-employed clients.

The buy to let sector continues to lead the way in changes and tweaks to criteria as lenders take a longer-term view on the financial security of both landlords and tenants. In the top spot this month was brokers searching for lenders who will lend on buy to let loans for limited companies and, once again, it is the search for lenders accepting first time landlords that comes in a close second. This search when looked at in conjunction with the third placed search for the requirement to be a homeowner shows us that even those who have yet to have a property of their own are keen to enter the housing market with a buy to let.

The secured loan sector has had another busy month of criteria changes and the search by brokers for the maximum LTV allowed continues to be the most popular search. There is however some cause for caution as for the second month in a row the search for lenders who will allow capital raising for debt consolidation is in the top five searches.

Criteria searches in the bridging sector also remained consistent from the previous month but like the secured loans sector it has been a month of multiple changes across the industry. Bridging lenders like others are trying to interpret market indicators and the potential consequences of rising inflation, the energy crisis and a significant increase in mortgage completion times.

The commercial loan sector is one that the Knowledge Bank team is following closely as each new government is put under pressure to take action to solve a lack of housing and we wait to see how this affects the market. This sector perhaps more than any other has been suffering the consequences of global economic factors that have affected their supply chain as well as the financial position of their potential customers and so brokers looking to place commercial cases are having to check criteria on a daily basis to ensure they are up to date with any changes.