Knowledge Bank's September criteria index reveals persistent concerns and creative strategies amid economic uncertainty

02 November 2023

Data from Knowledge Bank's September criteria index reveals persistent themes of a financial landscape that continues to challenge both borrowers and lenders.

While some trends have remained consistent throughout the year, indicating long-standing challenges in the market, emerging trends suggest that brokers are exploring new strategies to navigate economic uncertainty and find solutions for their clients.

The residential sector continues to feature 'Maximum Age at End of Term' as the most searched term. A trend that underscores the industry's caution around lending to older individuals, with possible concerns about repayment affordability as applicants get closer to retirement.

In the buy-to-Let sector, 'Lending to Limited Companies' remains the top search, a trend that has been consistent throughout the year. This is no surprise as portfolio landlords will continue to structure purchases through a corporate entity while it presents tax advantages, and more favourable mortgage options.

The search term 'Joint Borrower, Sole Proprietor' has seen a surge in the residential sector over the past three months. This trend indicates that brokers are still looking for creative solutions to handle mortgage affordability in the currently economy. The addition of a partner or family member can benefit an application if one has a low income, a poor credit history, or perhaps simply for tax efficiency.

Self-build mortgages have also been a point of focus, with a diverse range of search terms month to month. As the structure of self-build mortgages is to release funds in tranches throughout a project, this likely makes them an attractive option for those looking to manage costs carefully during the construction process.

In the Second Charge sector, the focus is clearly on maximising borrowing, with 'Maximum LTV' consistently ranking as the top search term. This suggests that people are looking to leverage their existing property to secure additional financing, possibly as a means to manage other financial obligations or debts.

Commercial property searches reveal a focus on both 'Minimum Loan Amount' and 'Maximum LTV,' indicating that developers are keen to maximise their property investments. This dual focus suggests a market that is both cautious and opportunistic, as investors look to navigate a complex financial landscape.

Nicola Firth, CEO of Knowledge Bank, commented: "The criteria searches we're seeing reflect a population that is having to adapt to a rapidly changing financial economy.

“Whether it's through new mortgage strategies or maximising investment opportunities, it's clear that both brokers and their clients are having to think more creatively and act more strategically than ever before."

With over 800,000 searches on Knowledge Bank in the first three quarters of the year, and more than five million criteria searches to date, it's evident that the platform continues to be an essential tool for brokers navigating these complex times.

For more information on Knowledge Bank's criteria index, visit www.knowledgebank.uk.

Criteria Activity Tracker

Top five searches performed by brokers on Knowledge Bank during September 2023
RESIDENTIAL BUY-TO-LET SECOND CHARGE EQUITY RELEASE
1 Maximum Age at End of Term Lending to Limited Companies Maximum LTV / Loan To Value Properties close to Commercial Outlets
2 Missed or Late Payments First Time Landlord Lend in Scotland Maximum Age at Application
3 Maximum Age at End of Term Using Employed Income Only No Requirement to be a Homeowner Employment - Time in Current Employment Maximum LTV / Loan To Value
4 Employment - Time in Current Employment Minimum Income - Interest Only / Part and Part Single Applicant Maximum Age at End of Term Property with Land
5 Joint Borrower Sole Proprietor First Time Buyers Minimum Loan Amount Timber Framed Construction

SELF-BUILD BRIDGING COMMERCIAL
1 Maximum LTV / Loan To Value Regulated Bridging Minimum Loan Amount
2 Minimum Loan Amount Minimum Loan Amount Semi-Commercial Properties
3 Lending to Limited Companies Maximum LTV / Loan To Value Excluded Commercial Sectors
4 Lend in Scotland Second Charge Loan Mixed Use Properties / Part Commercial
5 Lend in Northern Ireland Commercial Property Maximum LTV / Loan To Value

Brokers wanting to be able to search the UK’s largest database of mortgage lending criteria, can visit: www.knowledgebank.uk