Debt issues in second charges revealed in four out of five top searches in Knowledge Bank’s February criteria index

07 March 2019

Knowledge Bank’s Criteria Activity Tracker for February shows that searches regarding people with debt issues were four of the five top criteria searches in the second charge category, for the very first time.

As the largest database of mortgage lending criteria held anywhere in the UK Knowledge Bank’s monthly criteria index reveals the searches brokers perform prior to mortgage product sourcing.

Concern might be raised within the second charge sector as four of the top five criteria searches were brokers seeking lenders who would allow debt or income issues. Brokers in February interrogated data within Knowledge Bank to find lenders who would allow unsatisfied county court judgements, ongoing debt management plans, adverse credit repair or borrowers on benefits with no earned income.

Highlights from the index come from the residential sector where the criteria that brokers were most interested in was the maximum age lenders would allow at the end of the mortgage term. With an increasing number of product options for older borrowers, it is crucial that brokers keep abreast of any age restrictions, or lack of, for residential mortgages so that they can be evaluated as part of holistic advice.

The main focus for brokers researching the buy to let sector in February was on finding lenders who would lend to first time landlords. This criteria search has placed in the top five for the past six months and so the desire for borrowers to secure their first buy to let could, and should rightly, be classified as a trend rather than a passing fad.

Top five searches performed by brokers on Knowledge Bank during February 2019:

	RESIDENTIAL	BUY-TO-LET	SECOND CHARGE	EQUITY RELEASE
1	Maximum Age at End of Term	First Time Landlord	Maximum LTV / Loan To Value	Property with an Annex / Outbuildings / Land / Acreage
2	Self Employed - 1 Years Accounts	Lending to Limited Companies	County Court Judgements - Unsatisfied	Freehold Flats
3	Help To Buy Equity Loan Scheme	Requirement to be a Homeowner	Debt Management Plan - Ongoing / Current	Early Repayment Charges
4	Defaults - Unsatisfied	First Time Buyers	All Benefits No Earned Income	Sheltered Accommodation
5	Defaults - Registered in the last 3 years	Portfolio Landlords - Minimum Income	Credit Repair for Adverse Credit	Maximum Loan To Value

	SELF BUILD	BRIDGING	OVERSEAS	COMMERCIAL
1	Barn Conversion	Regulated Bridging	Applicants Paid in a Foreign Currency	Maximum Loan To Value
2	Lend Against Land	Maximum LTV for Bridging	British National Working Overseas or Offshore	Commercial Owner Occupier
3	Purchase of Land	Residential Property	Self Employed - 1 Years’ Accounts	Semi-Commercial Properties
4	Applications from Property Developers	Development Bridging – Maximum Loan to GDV LTV against End Value	Foreign Currency Mortgage Lending	Commercial Investment Mortgages
5	Interest Only During Build	Adverse Credit	Accountant Qualification	Maximum Period for Interest Only

Nicola Firth, CEO of Knowledge Bank said, “Once again the criteria index allows us to get ahead of the market and understand the cases that brokers are actually trying to place rather than just those that make it through the lending net. An increase in the number and complexity of products can be seen in each and every lending sector and so the challenge for brokers to find the right home for their clients’ loan becomes more and more onerous. With new lenders entering the market and existing lenders expanding their product options

“We also constantly hear from brokers that criteria searching, in addition to helping them save time in placing cases, vitally enables them to evidence and document their process should their advice be questioned at any time in the future. Borrowers and regulators alike simply aren’t concerned how difficult it is to keep abreast of all available product options, just that it is done.”