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09 October 2018

The most recent Criteria Activity Tracker provided by Knowledge Bank has revealed the most searched criteria by brokers during the month of September.

Knowledge Bank contains over 70,000 pieces of criteria from over 150 lenders making it the largest source of criteria data for the mortgage sector. As a result, the monthly criteria activity tracker is the definitive source of data on mortgage and loan criteria searching, and is unique in the market as it shows cases that brokers are trying to place rather than ‘done deals’.

During September Knowledge Bank also added two new lending types to its system – commercial and bridging, while overseas mortgages have been added with referrals to Simon Conn Overseas Property and Finance Specialist. These are now included in the Criteria Activity Tracker results below.

Highlights from the tracker reveal that in the residential sector, brokers’ most popular search was for lenders who would accept self-employed applicants with just one year’s accounts. This is perhaps unsurprising when you consider that data from the Office for National Statistics shows that 4.8 million people were registered as self-employed in 2017, which is the equivalent of around 15% of the UK workforce.

Within buy-to-let this month the focus has shifted to new borrowers, as brokers searching for lenders who will accept first time landlords and first time buyers take the top two spots in the table. With uncertainly around future stock market movement and investment opportunities following Brexit these searches suggest that bricks and mortar may once again be high up the agenda for those looking for a home for their long-term investments. Feedback from brokers bears this out with many revealing a rise in interest from younger borrowers looking at buy-to-let as an investment while they remain living at home with their parents.

Bridging appears in the searches for the first time and it’s interesting to note that the top category searched for is regulated bridging, clearly demonstrating the growth in demand for this type of bridging.

The top category in Commercial is for semi-commercial properties. Packagers and buy-to-let lenders have fed back that there has been a shift recently in landlords moving from straight residential properties to semi commercial in order to avoid the extra stamp duty and other tax burdens that are now associated with residential buy-to-let. It is interesting to see that this is immediately borne out by the searches being conducted by brokers this September.

Finally in the Overseas category it is interesting to see that the top search for is for buy-to-let. Simon Conn says, “Buy-to-let products as we know them, do not generally exist abroad as they do here as foreign lenders do not usually take rental income into account. The top country enquiries at the moment are for France and for Spain. In France people are predominantly looking to buy for lifestyle reasons; in Spain people are typically looking to buy to rent a property out and generate a future income.”

The charts below show the top five searches for the eight lending types on Knowledge Bank.
 
Top five searches performed on Knowledge Bank by brokers during September 2018

Nicola Firth, CEO of Knowledge Bank said,

“Despite an unusually busy August, September still showed a marked increase in search activity in each of the lending categories. Anecdotal feedback revealed that this was driven by borrowers’ unease following the bank base rate rise and uncertainty over what this means for future borrowing.

“This, coupled with new entrants to the lending sector means more products, more criteria and more confusion as to whether borrowers qualify for the loans they are after.

“As a result, there exist tremendous opportunities for brokers to add value for potential borrowers who may not fit, or may not believe they fit, traditional products. This can only be helped by the three new lending categories on Knowledge Bank. Brokers who offer criteria searching can find this pays huge dividends as a quick search of criteria against a client’s circumstances can offer reassurance for existing applications while generating opportunities and solutions with new lenders, some brokers may not previously have realised was possible.”