New year rings in the changes for broker criteria searching!
15 February 2023
Knowledge Bank’s monthly criteria index has revealed that 2023 has begun as 2022 ended with a shake-up in the most popular searches performed by brokers each month.
The UK’s largest database of mortgage lending criteria keeps track of the most common searches performed by brokers as they look to place a client’s case. Rising interest rates, changes in borrowers' circumstances and lenders’ tightening criteria during a cost-of-living crisis has heaped pressure on brokers to find a home for their client’s mortgage.
Knowledge Bank CEO Nicola Firth said “2023 has started with an uncertain financial landscape for many existing and prospective borrowers. With the bank of England base rate rising to 4%, household budgets are being stretched and placing mortgage cases has become increasingly challenging for brokers. Lenders continue to refresh products with more regularity than normal, and criteria tweaks are being made in an attempt to adjust to customers' needs. It is therefore more important than ever that brokers get it right first time by ensuring that a borrower fits criteria prior to product sourcing and submitting an application.”
The January criteria index shows that in the Residential category the search for ‘Missed or Late Payments’ shot up the ranking of the top five most common searches to second place. Another change was the search for ‘Interest Only’ which entered the top five this month suggesting that borrowers are looking for ways to keep monthly payments as low as possible.
The Buy to Let sector saw the top two searches for ‘Lending to Limited Companies’ and ‘First-Time Landlords’ retain their places for the second month in a row. However, the search for lenders requiring the ‘Borrower to be a Homeowner’ rose to the third spot and the search for ‘Interest Only/Part and Part Single Applicant’ re-entered the top five after dropping out last month.
Criteria searches in the Equity Release sector saw a shake up with ‘Married Couple Application in a Single Name’ claiming the top spot. Other changes of interest include the search for ‘Early Repayment Charges’ which, as the third most popular search in January suggests that borrowers are worried about being tied into a higher rate should prices fall in the future.
The most popular search in the Second Charge category was for ‘Maximum LTV’ once again followed closely by the ‘Minimum Loan Amount Allowed’ and the ‘Maximum Age at the End of the Term’. However, entering the top five searches in January was the search for ‘Unregulated Buy to Let’ which shows an appetite from borrowers to use secured loans for commercial buy to let premises.
Bridging and Commercial loan searches also saw a January shake up with ‘Regulated Bridging’ the most popular search in the bridging sector followed closely by ‘Minimum Loan Amount’ and ‘Maximum LTV’ taking up the top three spots.
The ‘Minimum Loan Amount’ search was the most popular in the Commercial category and the search for mixed use ‘Properties/Part Commercial’ rose up to third place.
Brokers wanting to find out more about Knowledge Bank can visit: www.knowledgebank.uk
