In its August criteria tracker report, Knowledge Bank said that this was due to the “perfect storm” of high inflation, cost of living crisis and changing government.
This has had a “marked impact” on household budgets and lenders’ affordability, the firm said.
Residential and buy-to-let searches
The most popular residential search was for the maximum age a borrower could be at the end of the term. This was the sixth consecutive month that this was top of the charts, with Knowledge Bank noting that borrowers were looking at maximum length of time to repay a mortgage.
The second most popular search was self-employed clients, which Knowledge Bank said proved that the self-employed market was growing, and brokers were keeping a “close eye on new restrictions” imposed on the sector.
On the buy-to-let side, the top search term was brokers looking for lenders that specialised in limited companies, followed by lenders who offer loans to first-time landlords.
The third most popular search was “requirement to be a homeowner”, with the criteria specialist saying this showed that those who do not have a property were keen to enter the buy-to-let sector.
Secured loans, bridging and commercial loans
Maximum loan to value was the most popular search for secured loans, and lenders who allow capital raising for debt consolidation was also in the top five searches.
Bridging searches remain “consistent”, according to Knowledge Bank, but the firm said that bridging lenders were also facing consequences of inflation, energy crisis and a significant increase in mortgage completion times.
Knowledge Bank said that its team was closely following the commercial loan sector as each new government was “under pressure to take action to solve a lack of housing”, which had knock-on effects to this market in particular.
The firm said that brokers with commercial cases were checking criteria on a daily basis to ensure they were up-to-date as supply chain issues and financial position of customers created issues.
August busy for criteria and product changes
Knowledge Bank CEO Nicola Firth said that August was typically a “quiet month” where “everyone is meant to be on holiday”.
However in reality, it was one of the company’s “busiest for criteria and product changes”.
She explained: “Lenders kept a close eye on external economic factors and how this affected a borrower’s ability to repay a loan and adjusted their criteria accordingly.
“The consistency of the most popular searches being performed by brokers month on month suggests that they are still trying hard to place cases and in some cases re-broking a mortgage application as lengthy completion times means mortgage offers run out.”
She said this did not mean brokers were resubmitting the same application as the client may now “fall outside of revised criteria”.
