The mortgage lending criteria that brokers searched for in January has been released by Knowledge Bank.
In some sectors brokers are searching for completely new criteria on behalf of their clients whereas in others, search topics remained stable and consistent.
Equity release
The top five most popular searches for equity release were all new and this is the first time that has happened in any category for over a year. Early repayment charges were the top search followed closely by brokers searching for lenders who would accept clients with adverse credit.
Making up the rest of the equity release top five most popular searches were for lenders who would accept an application from a married couple in a single name, applications from those in sheltered accommodation and lenders who would offer the maximum loan amount.
The self-build sector was another that started 2020 with a shake up as four of the top five most searched for categories by brokers were new. The search for the maximum LTV retained the top spot while the second most searched for criteria was the maximum loan amount that can be secured.
Residential market
Things remained slightly more consistent in the residential market with the most searched for criteria once again being the maximum age lenders will allow at the end of the mortgage term. This suggests that borrowers in 2020 are continuing to look at extending their mortgages into retirement.
The search for ‘capital raising for debt consolidation’ highlights an area, or time of year, when historically borrowers look to get on top of their finances, especially if they overspent at Christmas. This search also came into the top five in the second charge category, which further indicates a desire by homeowners to get their financial ducks in a row in the new year.
Secured loans and bridging
Criteria searches in the secured loan and bridging markets remained relatively consistent from December 2019 with brokers using the criteria search system to find the maximum loan amount possible for their clients.
Buy-to-let
Of particular interest in the buy-to-let category was the search for lenders that will lend to expatriates. With Brexit negotiations fully underway, there appears to still be some doubt for expats living in the EU as to their futures.
The fact that these people are looking at BTL properties in the UK shows that some are already hedging their bets by investing in property ‘back home’.
Matthew Corker, lender relationship manager from Knowledge Bank, said: “While some sectors witnessed a radical shake up of client needs some are notably more consistent and predictable.
“What this does highlight is how difficult it continues to be for brokers to balance the changing needs of their clients with lenders ever-changing criteria.”
Criteria Activity Tracker
Top five searches performed by brokers on Knowledge Bank during January 2020
| RESIDENTIAL | BUY-TO-LET | SECOND CHARGES | EQUITY RELEASE | |
| 1 | Maximum Age at End of Term | Lending to Limited Companies | Maximum LTV / Loan to Value | Early Repayment Charges |
| 2 | Self Employed – 1 Years Accounts | First Time Landlord | Married Couple Application in One/Single Name | Adverse Credit |
| 3 | Interest Only | Requirement to be a Homeowner | Capital Raising for Debt Consolidation | Married Couple Application in One/Single Name |
| 4 | Capital Raising for Debt Consolidation | Expatriates | Debt Management Plan – Ongoing / Current | Sheltered Accommodation |
| 5 | Defaults – Registered in the last 3 years | Minimum Income – Interest Only Single Applicant | Child Benefit | Maximum Loan Amount |
| SELF-BUILD | BRIDGING | COMMERCIAL | |
| 1 | Maximum LTV / Loan to Value | Maximum LTV for Bridging | Semi-Commercial Properties |
| 2 | Maximum Loan Amount | Regulated Bridging | Maximum LTV / Loan to Value |
| 3 | Maximum LTC (Loan to Cost) | Minimum Loan Amount | Minimum Loan Amount |
| 4 | Ex Pats Self Employed | Commercial Property | Commercial Owner Occupier |
| 5 | Retained Profit in Company | Second Charge Loan | Excluded Commercial Sectors |
By Joanne Atkin
Source: Mortgage Finance Gazette