Knowledge Bank’s industry criteria tracker revealed the most common searches used by brokers to find a lender who will consider their client.
The tracker showed that the criteria ‘missed or late payments’ appeared for the first time among the top five residential mortgage searches in May.
Knowledge Bank said the rise was a result of increasing interest rates and the much publicised cost of living crisis, with fuel, food and energy bills rising exponentially for most households.
It said brokers’ top residential loan search term in May was ‘maximum age at end of term’ as borrowers looked to extend the life of their mortgage term.
In an indication of how the UK’s evolving workplace is affecting borrowing, the search for self-employed with one year’s accounts jumped up to second place after only entering the top five last month.
Among buy-to-let mortgage searches, ‘first-time landlords’ was the top search term for the third month in a row. Second place was held by brokers searching for buy-to-let lenders who will consider lending to limited companies.
Commercial and bridging mortgage search criteria
The most common search for clients with bridging needs remained consistent in May with ‘regulated bridging’ taking the top spot, followed closely by ‘minimum loan amount’ and ‘maximum loan to value (LTV)’. Like the commercial sector, activity in the bridging sector remained robust throughout May with the number of broker searches increasing month-on-month.
The top five searches in the commercial sector had a new entrant in May as brokers searched for lenders who would consider ‘mixed use properties that are part commercial’. This search breaks back into the top five searches for the first time since January.
Nicola Firth (pictured), chief executive of Knowledge Bank, said there was increasing pressure on brokers to secure a product for their client while rates were still affordable.
“Additionally, with reports of low housing stock on the market the competition for houses is fierce and so buyers really need to have their mortgage offer locked and loaded so that they can act quickly to secure their dream property. As the rush for the last remaining low rates heats up brokers can avoid wasted time in the application process simply by checking criteria conditions prior to a product search.
“With interest rates rising and household bills taking up an increasing share of household income, affordability looks set to be impacted and lenders will be forced to adapt criteria accordingly. Lenders are very aware that household incomes are being adversely affected by cost of living rises and so are likely to tweak their criteria to ensure a high level of responsible lending.”