Bank of Mum & Dad feature in monthly Criteria Activity Tracker

06 September 2018

The most recent Criteria Activity Tracker provided by Knowledge Bank has revealed the most search criteria by brokers during the month of August.

Six lending types are included in the tracker and with over 70,000 pieces of criteria from over 100 lenders on its system Knowledge Bank is the largest source of criteria data for the mortgage sector.

As a result the monthly criteria activity tracker has become the definitive source of data on mortgage and loan criteria.

Within the residential sector the most popular criteria searched by brokers in August was for lenders who will accept ‘Joint Borrower Sole Proprietor’.

These types of products are typically designed to allow close family members to help with a mortgage application and most commonly it is the ‘bank of mum and dad’ that is the source of the funds as the parents can use their income as the second applicant. Other top searches in the residential sector included the maximum age allowed at the end of the term, maximum LTV and a search for lenders who would allow capital raising for debt consolidation.

Within Buy to Let lending this month’s rankings remain fairly consistent from July although the search for lenders who accept first time landlords takes the top spot for the first time. Perhaps a sign that a new raft of potential landlords are considering entering the market? It is also worth noting that ‘complex buy to let’ changes have been made by multiple lenders this month although this is yet to break into the top five. As a result this is an area that brokers should definitely consider double checking before placing a case as changes can happen thick and fast in this sector.

Other results of note include the Self Build sector where the top search conducted is for lenders allowing capital raising for land purchase which suggests a continuing appetite for this market.

The chart below shows the top five search results for six lending types.

Top five searches performed on Knowledge Bank by brokers during August 2018

	RESIDENTIAL	BUY-TO-LET	SECOND CHARGE
1	Joint Borrower Sole Proprietor	First Time Landlord	Maximum LTV
2	Maximum Age at End of Term / Loan to Age	Lending to Limited Companies	Expatriates
3	Maximum LTV	Requirement to be a homeowner	Mixed use / part commercial
4	Capital raising – debt consolidation	Expatriates	Maximum borrowing
5	Interest only	Holiday Lets	Capital raising home improvements

	SELF BUILD	OVERSEAS	EQUITY RELEASE
1	Capital raising – Purchase of land	Holiday Home	6 months rule / Day 1 Remortgage
2	Timber framed / non-standard construction	Expatriates	Minimum age at application
3	Lender Exposure Limits within a Development / Postcode / Area	Maximum LTV	Solar panels
4	Employed – proof of income	British National working abroad / Offshore / Overseas	Minimum Term
5	Conversion of Houses of Multiple Occupation (HMO)	Accountants projection	Minimum age of second applicant

Nicola Firth, CEO of Knowledge Bank said,

“Although August is traditionally a quiet month in the industry we’ve seen no slow up in broker’s activity in their effort to see where their clients will fit ever-changing lending criteria. Feedback from brokers over the month suggests that because of the base rate increase borrowers have a greater than before level of uncertainty about the products on offer and their ability to qualify for them. Coupled to this is evidence of a raft of lenders tweaking and refining their criteria in tandem with price changes as a result of what is only the second base rate rise in over a decade.

This market uncertainty is a perfect example of where criteria sourcing can pay huge dividends. Brokers seem to be really switched on to the fact that a quick source of criteria against a client’s circumstances can offer reassurance for exiting applications and also generate new lending opportunities.”