October sees shake-up in brokers’ criteria searches

14 November 2019

New figures from criteria search specialist Knowledge Bank show a shake-up in the most common criteria searches performed by brokers in October. Changes were seen in the residential, equity release and buy to let categories.

In the equity release sector the new, most common, search was for ‘additional borrowing’ followed in second place with ‘ad-hoc payments on additional borrowing’. This suggests a heightened desire for borrowers to be able to unlock more funds whilst keen to maintain control over repayments.

The desire for people to unlock the equity in their homes continues to be strong but feedback supporting these statistics suggests that borrowers are looking far more closely at not only how much they can raise but how easily they can manage the monies raised by their homes. This is further supported by the fact that the fourth and fifth most popular searches were related to whether interest payments were allowed. This suggests that even at this pre-application stage borrowers are asking brokers to search for a lender who will let them make lower monthly repayments.

Within residential searches brokers have, for the first time, been searching for lenders who will only leave a ‘soft footprint at the decision in principle stage’. With ‘defaults registered in the past three years’ being a fellow top five search last month, this clearly suggests that brokers are searching more often and more widely to place clients with past credit problems and don’t want the search process itself to lower the success of an application.

Within the Buy to Let sector brokers have been looking for lenders who would consider ‘first time landlords’, making this the most popular search performed during the entire month, the first time this has happened since July. Once again, anecdotal feedback underpins this result with brokers reporting a continuing trust in bricks and mortar as a long-term investment and property strategy.

Meanwhile, there was more change in the bridging sector with searches for regulated bridging losing the top spot it had held for the past two months to searches for the minimum loan amount.

Additionally, in the commercial sector we saw searches for mixed-use properties, i.e. part commercial, enter the top five searches for the first time. As the commercial sector continues to develop there are constant signs of innovation from lenders in considering property types.

The Knowledge Bank criteria activity index is unique in that it reveals brokers’ activity in trying to meet the loan aspirations of their clients. The data produced by Knowledge Bank shows the cases brokers are trying to place and so offers a unique viewpoint on demand as well as supply. As the largest mortgage criteria search system in the UK, Knowledge Bank holds almost 100,000 criteria from over 200 lenders and reported that there were almost 30,000 changes to mortgage lending criteria in the first half of 2019.

Criteria Activity Tracker
Top five searches performed by brokers on Knowledge Bank during October 2019

Nicola Firth, CEO of Knowledge Bank said, “It’s been a month of change in criteria searching and we have seen movement in several of the lending categories over the past month. This is an indication of just how difficult a job mortgage brokers have in satisfying the ever-changing needs of their clients.

“The mortgage sector continues to show high levels of fluidity and these results show that different product types rise and fall in popularity from month to month. Brokers occupy an absolutely crucial space in the mortgage market as they have to balance the desires of borrowers with almost daily changes to lending criteria. As a result, to get the best deal for clients – and ensure that they are meeting regulatory requirements – it’s vital that brokers keep pace with movements in the market and ensure they’re using a tool with up to date product knowledge.”