mortgage
Marketing No Comments

First-time buyer mortgage applications hit six-month high in March – First Direct

The value of mortgage applications submitted by first-time buyers reached £8bn in March, the highest amount in six months, data from a bank has shown.

The First Direct first-time buyer trends report based on data from CACI revealed that the value of applications in March was also 42 per cent up on February’s £8bn.

However, despite the application value reaching its highest level since September last year, the first quarter of 2023 was down by 26 per cent compared to the same period in 2022. In March last year, the first-time buyer application value reached £10.8bn, marking a two year high.

Activity was more subdued in April as the value totalled £6.2bn, however, this was the second highest amount in six months.

The mortgage market as a whole, including homemovers and remortgagors, reached a value of £26.6bn in March. This was the first time the value of applications passed £20bn since September last year, and it was also £8.9bn up on February.

Carl Watchorn, head of mortgages at First Direct, said: “Typically, March and April tend to be some of the busiest months of the year when it comes to first-time buyer activity. March usually sees a sharp spike in applications after what is often a quiet start to the year.

“It’s really encouraging to see the market recovering during March and April to a level of applications not seen since September 2022. A closer look at this data also reveals that the value of first-time buyer loans has doubled since Q4 last year; a segment fundamental for a vibrant housing market.”

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

The average first-time buyer loan was £211,766 in April, which was an 8.8 per cent increase or more than £17,000 rise since the start of the year.

First Direct said it was also the highest figure since July 2022 when the average loan amount reached £212,153.

Loan sizes among first-time buyers saw the biggest jump, but average homemover loans also rose by 14,200 since January while there was a £9,500 increase in average remortgage loans.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Watchorn added: “The news that average first-time buyer loans are increasing is likely indicative of increased confidence in the sector, although it does once again highlight the challenge faced by many young people trying to bridge the gap between average income and the average house price.

“It’s also important to consider that the average first-time buyer house deposit is now more than £60,000. Faced with higher rates than we’ve seen in a number of years, many buyers will be looking to save up as big a deposit as possible in order to secure a cheaper rate against a lower loan to value (LTV) product.”

By Shekina Tuahene

Source: Mortgage Solutions

mortgage
Marketing No Comments

Skipton launches deposit-free mortgage aimed at renters

A deposit-free mortgage specifically aimed at people currently renting has been launched by a UK building society.

While a handful of other no-deposit deals are available, they all need the financial backing of family or friends.

Skipton Building Society says while its deal requires 12 months of on-time rental payments and a good credit history, it does not need a guarantor.

However, at 5.49% the interest rate is more expensive than the average five-year fix of 5%.

Generation Rent, which campaigns on behalf of private renters, says the shortage of affordable properties within the budget of first-time buyers is still the main stumbling block for those struggling to get on the property ladder.

“It’s not necessarily going to help all the people who are looking to buy a first-time home if there aren’t more houses available to buy,” says Will Barber Taylor from Generation Rent.

Currently there are 15 other zero-deposit products on the market, according to financial data firm Moneyfacts, accounting for just under 0.3% of the UK market.

First-time buyers are facing an uphill battle. Rapidly rising rents have made saving for a deposit increasingly difficult, at the same time that the government’s flagship Help to Buy scheme, aimed at helping first-time buyers, is no longer open.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

The Skipton, which is the UK’s fourth biggest building society, says it recognised a “gap in the market”.

Stuart Haire, the society’s chief executive, told the BBC that “until now there has been no solution for them [renters] to buy a property due to a lack of savings or access to family wealth”.

David is renting with his partner and new baby in North Yorkshire. “It’s getting that deposit together that’s really difficult with rent prices,” admits David.

“If I can prove I’ve been paying rent for the last 10 years of my life why can’t I have a mortgage.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

The government’s Help to Buy scheme saw the Treasury lending homebuyers between 5% and 20% of the cost of a newly-built home, and up to 40% in London.

The scheme closed to new applicants in October 2022, but there are rumours that something along similar lines could be re-introduced.

But a rise in zero-deposit mortgages may not be welcomed by everyone, as riskier mortgages with a high loan to value were a root cause of the 2008 financial crash.

Mortgage expert Andrew Montlake says then lenders were just interested in volume rather than quality.

“The world is very different now,” he says, and adds that his opinion has changed over the past 15 years, as long as the 100% loan value mortgages are “underwritten sensibly”.

By Colletta Smith & Nicky Hudson

Source: BBC News

fixed and variable mortgages
Marketing No Comments

Leap in mortgage approvals signals market recovery

Bank of England statistics show that agreed mortgages climbed to 52,000 in March, up from 44,100 the previous month.

The total number of mortgage approvals has bounced back after hitting a new low at the end of last year, Bank of England figures show.

Mortgages agreed jumped to 52,000 in March, from 44,100 in February, as the market recovers from the damage caused by the Mini-Budget.

The overall total though remains below the monthly average for 2022 of 62,700.

LOWEST SINCE 2009

Approvals for remortgaging with a new lender also increased, to 32,200 in March from 28,200 in February. The ‘effective’ interest rate on newly drawn mortgages increased to 4.41% in March.

Gross lending increased slightly from £20.4 billion in February to £20.6 billion in March, while gross repayments fell from £19.9 billion to £19.3 billion.

Statistics from the Bank of England released in January showed mortgage approvals fell to the lowest level since 2009 if the slump during the Covid pandemic period was excluded.

Approvals for house purchases dropped to 35,600 in December, from 46,200 in November. This was the fourth consecutive monthly decrease, and the lowest since May 2020.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

INDUSTRY REACTION

Tom Bill, head of UK residential research at Knight Frank, says: “The UK housing market continues its convincing rebound following the chaos of the Mini-Budget.

“Price declines appear to be bottoming out and transactions clearly hit their low-point in January.

Buyers have accepted the new normal for mortgage rates as stability returns to the lending market. Boosted by savings accumulated during the pandemic, record levels of housing equity and a strong jobs market, we expect sales activity will be solid without being spectacular this year.”

Tomer Aboody, director of property lender MT Finance, says: “Higher mortgage approvals in March show that there is slightly more confidence in the market, which is cemented by the Prime Minister’s push for lower inflation, and the markets predicting lower long-term rates than first indicated.

“However, while rising, transactions are down compared with before the pandemic so some assistance from the government to try to push volumes is now required.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

Mark Harris, CEO of mortgage broker SPF Private Clients, says: “With mortgage approvals picking up again, it appears as though buyers are shaking off recent concerns about the wider economy and getting on with moving.

“The worst of the pain may not be over with another quarter-point rate rise expected next week as inflation proves to be more stubborn than the Bank of England expected.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “We regard mortgage approvals as a very useful indicator of future direction of travel for the housing market and these figures are no exception.

“Lending was in the doldrums, reflecting the quiet period between the Mini-Budget and the end of last year, whereas the approvals figures illustrate that stabilising mortgage rates and inflation is prompting an increase in activity.”

By David Callaghan

Source: The Negotiator

fixed and variable mortgages
Marketing No Comments

Mortgage products rebound with second highest monthly increase taking total to over 5,000

Mortgage availability increased by 774 products in April to 5,146, the second largest monthly rise on record.

It marks the first time the number has risen above 5,000 since May 2022 and is the highest count since February 2022 when it stood at 5,356.

The only bigger monthly increase was October to November last year when 869 new products were launched, the data from Moneyfacts shows.

There are now more than double the number of home loans on the market than October 2022 at the height of the mortgage crisis when rates rose sharply in the mini-budget fall out.

Higher borrowing costs as a result of the unfunded list of commitments made by Liz Truss’ government forced lenders to withdraw products from the market and push up interest rates.

From September to October the number of products dropped by 42 per cent to 2,258. In November they recovered slightly to 3,117.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

For higher deposit deals, available mortgages at 60 per cent loan to value in April increased by 45 to a total of 702, the highest at that borrowing ratio on Moneyfacts’ record.

For borrowers with smaller deposits there is also an increase in choice. The 85 per cent LTV product bracket saw one of the largest rises over the month and at 806 available deals the tier is at the highest level on Moneyfacts records.

But, there is a sting in the tail. Mortgage rates have nudged higher this month for both two-year and five-year fixed rates. It is the first time this year average rates have increased over a month.

The two-year fixed rate average across all loans is 5.35 per cent and the five-year average is 5.05 per cent – this is up from 5.32 per cent on two years and 5 per cent on five years in March.

At the same time the average standard variable rate is now 7.3 per cent, the highest level since February 2008 when it hit 7.31 per cent.

A standard variable rate is the rate a lender moves you to when your fixed or tracker mortgage expires. They track the Bank of England base rate plus an additional charge.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

Rachel Springall, of Moneyfacts, said: ‘Interest rate competition among lenders was mixed in the past month, however it is widely expected that fixed mortgage rates will reduce over the next few months, but this will be determined by fluctuating swap rates and lenders appetite for business.

‘Those borrowers with a large deposit or equity may be pleased to see the average rates at 60 per cent loan-to-value for a two-year or five-year fixed mortgage stand below 5 per cent.’

However, for those who coming off a two-year fixed mortgage and wish to refinance on the same term (60 per cent LTV) face a shock.

The average rate on a two-year fixed mortgage in April 2021 was 1.63 per cent, compared to 4.95 per cent for April 2023.

This significant rise in rates means that for a £200,000 mortgage over 25 years a borrower would have paid £812 a month two years ago would now pay £1,163 – an increase of £351.

Earlier this year a brief rates war between lenders saw some fixed deals dip to as low as 3.75 per cent. However, they have since risen again but there are still deals below 4 per cent on offer.

By Fran Ivens

Source: This is Money

fixed and variable mortgages
Marketing No Comments

UK mortgage approvals rise for first time in six months

Collapse in demand for property may be bottoming out but no return to boom conditions, analysts say.

Mortgage approvals rose for the first time in six months in February amid signs that the collapse in demand for property seen last autumn might be bottoming out.

Figures from the Bank of England showed that home loan approvals rose from 39,647 in January to 43,536 in February – reversing a downward trend in place since August 2022.

But analysts said that with interest rates rising there was no prospect of the market returning to the boom conditions seen during the pandemic and its aftermath, with one predicting that activity would be 30% lower in 2023 than in 2022.

In a sign of the turbulent conditions seen during Liz Truss’s brief premiership last autumn, the Bank said net mortgage lending dropped from £2bn in January to £0.7bn in February, the lowest since April 2016 apart from when the economy was locked down during the Covid pandemic. It usually takes several months for approvals to be turned into actual home loans.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

Andrew Wishart, UK property analyst at the consultancy Capital Economics, said: “Reflecting the partial unwinding of the spike in mortgage rates following the ‘mini’ budget, mortgage approvals rose to their highest level for three months in February. However, with mortgage rates unlikely to fall much further in the near term, lending will remain weak. Our forecast is that approvals will be 30% lower this year than in 2022.”

The Bank – which raised official interest rates for an 11th successive time to 4.25% last week – said the cost of servicing a mortgage was rising. The effective home loan rate – the interest paid by a new borrower – rose by 0.36 percentage points to 4.28% last month.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

Martin Beck, chief economic adviser to the EY Item Club, says: “The latest household lending data indicated continued weakness in housing market activity, albeit with signs that the worst may be in the past.” Approvals were still well below the average of 62,677 recorded in 2022, he added.

The Bank of England’s monthly money and credit report also showed consumers borrowing more in order to finance their spending. Consumer credit rose by £1.4bn in February – split almost evenly between credit cards and other forms of borrowing.

By Larry Elliott

Source: The Guardian

Interest rates
Marketing No Comments

Industry reacts to ‘disappointing’ yet ‘inevitable’ base rate rise

While coming as little surprise to most, today’s base rate rise to 4.25% has still been met with disappointment, along with some resignation as to the predicted direction of travel.

The general feeling is that, although less than the 50 basis points rise seen in February, a rise was inevitable given the inflationary uptick in February and the US central bank rise yesterday.

There’s concern for those on variable rates, but with a flurry of lenders having reduced fixed rates this week, it’s felt the predicted base rate rise has been factored in and little impact will result in that area.

Bluestone Mortgages sales and marketing director Reece Beddall says: “While today’s decision is clearly in response to inflation’s surprise jump to 10.4%, it will be a tough pill for consumers to swallow, nonetheless. Interest rates have risen consecutively for almost a year, pushing mortgage repayments higher still and putting a chokehold on people’s personal finances. Affordability challenges will no doubt remain for the foreseeable future.”

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

Moneyfacts finance expert Rachel Springall comments: “A rise to base rate will come as disappointing news to borrowers who are not locked into a fixed rate mortgage. The incentive to fix is clear from the continued rise to the average standard variable rate, which is now above 7%, a level not breached since 2008.”

Also expressing disappointment, London estate agent and former RICS chairman Jeremy Leaf adds: “There is a close call between change and no change – this latest rise in rates is a huge disappointment for the housing market as we were hoping the bank would trust in its own data and leave well alone.”

Stonebridge chief executive Rob Clifford described the rise as a ‘racing certainty’ but doesn’t expect big changes to follow.

“Once it was revealed that inflation had risen to 10.4% in February, followed by the Fed’s decision to raise rates yesterday in the US, it seemed like a racing certainty the MPC would have to act today with a further bank base rate rise.

“The markets have already been reacting to that news with swap rates increasing, and by this morning that rate rise already seemed priced in. My feeling is that the search for business – particularly from the mainstream, high-street lenders – will continue to keep mortgage rates round about where they are,” he says.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

Just Mortgages operations director John Philips adds: “Although the base rate has gone up, we have seen mortgage prices falling in recent months and customer enquiries to our brokers across the country have been remarkably robust since the start of the year.”

A possible outcome could be more demand for rental housing, says IMMO real-estate platform co-founder Avinav Nigam.

“The result of this is more demand for rental housing, and therefore a greater need to put time, money and effort into improving our private rental sector housing stock,” he comments.

By Linda Ram

Source: Mortgage Strategy

mortgage
Marketing No Comments

Four-day week ‘would not work for mortgage market’ ‒ analysis

A four-day working week is a good idea in theory, but not really compatible with the workload of a typical mortgage broker, according to intermediaries.

Last week saw the publication of the results of a trial into a four-day week, with the majority of firms stating that not only had it improved performance but that they were continuing with the structure.

However, when quizzed by Mortgage Solutions, mortgage brokers were split on the idea of a four-day working week. Advocates argued it had helped them to be more productive, working smarter during the week, though there was scepticism about the impact it could have on delivering adequate service to clients.

Boosting productivity

One mortgage broker who is already working a four-day week is Samantha Bickford, mortgage and equity release specialist at Clarity Wealth Management.

She said that since going self-employed, she has worked on the basis of usually having Frdays off, arguing that it leads to a healthier work/life balance.

“This encourages me to be more productive, work harder and smarter during the week, knowing I am taking a day or even an afternoon or few hours for myself at the end of the week. Especially with those dedicating their weekends to their children and family time, this means you have a day for yourself and your own mental health,” she explained.

Gary Boakes, director of Verve Financial, said that he too had been working a four-day week until recently, noting that he “felt I needed the extra time during the day to work on the business rather than in the evening”.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

Maintaining service levels

Stuart Powell, managing director of Ocean Equity Release, said that while he was all for a four-day working week in theory, it presented a challenge for smaller firms in ensuring such a structure did not impact their customer service levels.

“Many firms give people different days off, however for firms with less than five staff, this may reduce coverage for clients and be an issue in holiday times,” he added.

Bickford agreed that fitting in with client expectations and lender service challenges can make picking working hours more challenging.

She said: “If the working week dictates I need to work on a Friday ‒ for example, if this is most convenient for the client or if the week is so busy it is not possible to take the Friday off ‒ I will of course, but in general I believe a four-day week encourages productivity. I have no qualms about working slightly longer days during the week to have this balance.”

Are we working at capacity?

However, not all brokers believe it is a workable option.

There is “no way” a business that interacts directly with the public could succeed with a four-day week, according to Craig Fish, director of Lodestone Mortgages & Protection, who noted that there are times when even not working on a weekend will have an impact on a broker’s business.

He added: “Lenders could make things easier by improving their systems, but the costs involved to do this are likely prohibitive, so I fear that brokers will find themselves working ever longer hours to ensure that the client is getting a first-class service.”

If advisers are able to do the same amount of work in four days that they were doing in five, then they are not working close to their capacity, suggested Andy Wilson, director of Andy Wilson Financial Services.

He added: “I believe most brokers will work quite long and unsociable hours if they want to meet their own and the business’s targets. I also feel most would exceed the four days just to get jobs done and get cases through more quickly.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

It might work for other industries, but not mortgages

Dominik Lipnicki, director of Your Mortgage Decisions, said that he was sceptical of how practical a four-day week would be for most businesses, noting that while he was a fan of flexible hours, “our clients would rightly expect to be able to be assisted at the very least five days per week”.

He continued: “I am not sure that many mortgage businesses would be able to afford to hire more staff to cover the extra day and if they did, surely, it is the clients who ultimately pay? I think that for some businesses, a four day week might work but that would very much be driven by the type of business that it is.”

This was echoed by Benjamin Blyth, director of Houz Mortgages, who suggested a four-day week does not really suit the mortgage industry as a whole. “We need the engine running seven days a week, but if a four-day week can be scheduled into rotas, it’s great for staff. I can never tie myself to four days because client demand will always vary across the seven days in a week.”

Working smarter, not harder

While many brokers were unconvinced about the merits of a four-day week, there was near consensus that technological developments had given them more control over the actual hours worked.

Chris Barker, managing director of Manchester Money, said that technology today means brokers can “pretty much work what hours they want, and from wherever they want to be, as long as it fits with their clients’ needs”.

Paul Seed, mortgage and insurance adviser at Mortgages 4 U, noted that meeting client expectations was now more about the response times rather than the hours or days worked.

He continued: “Speed of response, especially with live applications, is increasingly critical to maintain a client’s trust. People want to know that they are in safe and responsive hands.”

Embracing the benefits of flexible working can also deliver a better standard of service, too, some suggested. For example, Kylie-Ann Gatecliffe, director at KAG Financial, said that her firm is smarter now in working around clients, removing the need to pull 70-hour weeks.

She continued: “We actually produce higher results, coming in feeling fresh and motivated. Whilst clients can still have appointments on an evening and on a weekend when required, we plan our diaries so the whole team have a balanced week, rather than everyone being stressed and under pressure trying to juggle life/work balance.”

By John Fitzsimons

Source: Mortgage Solutions

house prices
Marketing No Comments

Mortgage Approvals Down but Sunnier Days Ahead for The Property Market in 2023

Recent uncertainty in the property market during the closing stages of 2022 has led to the number of mortgage approvals declining by -20% in the past year, while the number of remortgaging approvals has soared as existing homeowners stay put and look to stabilise their financial foundations by borrowing more.

The cost of living crisis and increasing price of borrowing has had a significant effect on the mortgage sector.

In 2021, there were a total of 944,704 house purchase mortgage approvals in the UK. In 2022, this dropped to 753,946 approvals, marking an annual decline of -20.2%.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you.

Financial concerns induced by the cost of living crisis clearly caused many potential buyers to postpone their plans in 2022, not least due to the fact that mortgage prices shot up seemingly overnight following the shambolic mini budget unveiled by the government in September of last year.

At the same time, the number of remortgaging approvals increased from 460,462 to 539,528 between 2021 and 2022, an annual rise of 17.2%.

This serves as further evidence of public concern brought on by recent economic uncertainties, with more homeowners trying to reduce their mortgage rates or release some equity to fund soaring costs elsewhere in their lives.

These market trends are further supported when analysing the overall monetary value of mortgage approvals.

In 2021, the total value of property purchase approvals was £208bn. In 2022, this dropped to £176bn, a decline of -15.3%.

At the same time, the overall value of remortgaging approvals increased from £92bn to £113bn, marking a 22.6% rise.

However, while the total value of homebuyer mortgages has fallen, the average value of each individual approval has actually increased by 6.2%, from £219,899 in 2021, to £233,510 in 2022.

This shows that while the number of buyers entering the market has fallen, the amount each is borrowing has grown, as they tried to contend with house price highs that were driven by the pandemic market boom and, as of yet, have shown little signs of reducing.

The average value of a remortgaging approval has also increased, rising by 4.6% between 2021 and 2022.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

“Despite house prices continuing to climb in 2022, the immediate economic uncertainty that rattled the mortgage sector following September’s mini budget has had a notable impact when it comes to the number of mortgage approvals attributed to new house purchases in 2022.

At the same time, there has been a notable uplift in homeowners deciding to play it safe and stick with their current home, opting to remortgage in order to improve both their home and their financial stability.

However, mortgage rates are already on the decline so far this year, dropping by -14% in January alone.

On top of that, the wider economic outlook for 2023 is looking far brighter than many people feared towards the end of last year.

All in all, we expect spring and summer to bring sunnier days to the property market and a rejuvenated level of buyer activity to sweep the market.”

Source: Property Notify

fixed and variable mortgages
Marketing No Comments

Green shoots of recovery appear in the mortgage market

Confidence in the mortgage market is showing healthy signs of recovery following the disruption of the mini-budget in September 2022, judging by the latest mortgage market tracker report from the Intermediary Mortgage Lenders Association (IMLA).

The average number of Decisions in Principle (DIPs) that intermediaries processed in Q4 fell slightly by two when compared to Q3 2022, reaching the level seen two years ago in the final quarter of 2020. Despite a drop in November (to 23 per intermediary), December saw a rebound, rising back up to 26 and matching the levels seen in July and August of 2022.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you

In Q4, the conversions of DIPs to completions also fell very slightly by 1% from Q3 2022, down to 37%. The business area and region seeing the biggest drop in conversions were in directly authorised DIPs and brokers operating out of the South of England, seeing falls of 11% and 6% respectively during Q4. Conversions for first-time buyers and buy-to-lets also remained steady with slight falls of 3% and 2%, reflecting a strong mortgage pipeline in the face of the macro-economic challenges now facing FTBs and some BTL landlords.

The dent in confidence caused by the mini-budget and resultant market volatility was evident in the data, with 29% of intermediaries reporting in Q4 2022 that they were ‘not very confident’ about the outlook for the mortgage industry, rising from just 4% during the same time period in the previous year. However, the most prominent dip in confidence for Q4 was during October, with November and December showing signs of stabilisation – returning to a 70% proportion of intermediaries who felt either ‘fairly confident’ (56%) or ‘very confident’ (14%) in December.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division.

Comparatively, intermediary confidence in their own business declined only slightly. In Q4, 11% of intermediaries reported being ‘not very confident’ in the outlook for their business, rising from the 5% reporting the same in the previous quarter. However, overall, 87% of intermediaries still reported that they were either ‘very confident’ or ‘fairly confident’ in their own business outlook during the final quarter of 2022 – a dip of only 7% from Q3 despite the October disruption and rising interest rates.

Kate Davies, executive director of the IMLA, commented: “There are green shoots here, with December marking a noticeable increase in confidence compared to October. The Bank of England’s continuing action to bring inflation under control, combined with strong competition amongst lenders to attract new business, are good indicators of recovery.”

By Jerome Smail

Source: Property Industry Eye

Buy-to-let landlords House price growth Strong demand London rental market UK house sales value UK House Prices UK property price surge
Marketing No Comments

Residential lending topped criteria changes in September

As the mortgage sector struggles with the uncertainty of future rate rises, tax changes and the cost-of-living crisis, broker’s criteria searches reveal a worrying decline in borrowers’ circumstances, the latest data from Knowledge Bank shows.

Knowledge Bank’s September criteria index reveals that 35% of all criteria changes during September were made to residential lending criteria.

The top search was for the maximum age at the end of the term as they look to spread repayments over the longest possible period.

However, the search for lenders accepting borrowers with late or missed payments entered the top five residential loan searches for the first time in six months.

Knowledge Bank suggests this shows a decline in borrowers’ financial circumstances.

The buy-to-let (BTL) sector accounted for 33% of all criteria changes during the month but the most common searches remained consistent with ‘lending to limited companies’ and ‘first time landlords’ the top two searches for the sixth month in a row.

Contact us today to speak with a specialist Commercial Finance Broker to discuss how we can assist you

Meanwhile, the equity release sector saw the greatest shake up in criteria searches with three of the top five searches new from last month.

The most popular search was for equity release lenders who would lend on properties with an annex and, combined with the search for acceptance of debt management plans also in the top three.

Knowledge Bank says this suggests that borrowers are looking to consolidate their households.

The bridging and commercial sectors accounted for 15% of all changes during September but searches remained consistent with the top three in both categories unchanged from the month before.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Knowledge Bank founder and chief executive Nicola Firth says: “Mortgage brokers continue to work tirelessly to place their clients’ mortgages in the face of daily product and criteria changes at an unprecedented level and this month revealed some worrying changes.”

“Brokers searching for lenders who will accept borrowers with missed or late payments made the top five searches for the first time in six months in both residential and secured loan searches.”

“Additionally, there were other signs that borrowers are in a declining financial position as they look to add lenders fees to the loans and the popularity of searches for equity release products for properties with an annex suggest households are consolidating their living arrangements.”

By Becky Bellamy

Source: Mortgage Finance Gazette