Relentless change is the only constant in UK mortgage criteria according to analysis Knowledge Bank
The research by the criteria specialist reveals that the top five most searched-for criteria by brokers have changed every single month in each of the eight lending types on Knowledge Bank over the past twelve months.
This equates to 96 different iterations of the most searched-for criteria rankings, an average of twelve in each of the eight categories in twelve months, which highlights the scale of change that brokers have to navigate in placing their clients’ cases. Client’s circumstances are continuing to get more complicated and so the need to balance the product each client desires with those available to them becomes an increasingly arduous task.
These findings go against expectations that there would be consistency in some of the product categories. There have been criteria that have consistently been the most searched-for as would be expected but certain unexpected trends have developed over the past twelve months.
These trends include the significant rise in criteria searching relating to acceptance of self-employed borrowers and borrowers looking for loans in later life. Both categories feature in almost every monthly list and the search for loans for self-employed borrowers has been in the top two for ten out of the past twelve months.
Stretching borrowing limits is one area that has remained constant through the past twelve months and searches on maximum loan to value appear in almost every top five list.
The full list of top searches is below:
Top five searches performed by brokers on Knowledge Bank during May 2019:
|RESIDENTIAL||BUY-TO-LET||SECOND CHARGE||EQUITY RELEASE|
|1||Maximum Age at End of Term||Lending to Limited Companies||Maximum Age at End of Term||Maximum LTV|
|2||Self Employed – 1 Year’s Accounts||First Time Landlord||Mortgage or Secured Loan Arrears or Defaults||Affordable Housing|
|3||Maximum Age at Application||Requirement to be a Homeowner||Maximum LTV||Tyneside Flats Cross Leases|
|4||Defaults – Registered in the last 3 years||Houses of Multiple Occupation (HMO)||Self Employed – 1 Year’s Accounts||Adverse Credit|
|5||Soft Footprint at DIP Stage||Minimum Income – Interest Only / Part and Part Single Applicant||Child Tax Credits||Applicant living in Tied Accommodation|
|1||Maximum LTV||Maximum LTV for Bridging||Age Gap Between Applicants||Semi-Commercial Properties|
|2||First Time Buyers||Regulated Bridging||Expatriates||Commercial Investment Mortgages|
|3||Custom Build – Interest Only during Build||Bridging Maximum Term||Maximum LTV||Maximum LTV for Commercial Investment|
|4||Minimum Age at Application||Bridging – Maximum Loan||Maximum Loan Amount||Maximum LTV|
|5||Private Pension Income||Lending to Limited Companies||Affordability calculator||Minimum Loan Amount|
Nicola Firth, CEO of Knowledge Bank said “Every single month in every single product category the list of the most searched for criteria has changed. This is remarkable and puts into perspective the challenge that brokers face in finding a home for their client’s borrowing needs. For too long now the expectation has been that clients have access to published products but this is simply not the case. Brokers are becoming increasingly aware that it’s no longer about the borrower choosing the lender but the lender choosing the borrower.”
“When we’re out and about talking to brokers about Knowledge Bank we very often have conversations with advisers who have started an application for a product only to later find out that their client falls outside of a criteria condition. This is hugely frustrating for both broker and client as the search process has to start again, which means delays and disgruntled clients. I believe that it is now imperative that brokers perform a criteria search prior to product sourcing so that the borrower knows the products they actually qualify for. Additionally, with ever increasing, and ever-changing, regulation it is crucial that brokers can defend their product selection when it is based on criteria restrictions and not price.”