Right to buy in top five most popular UK mortgage criteria searches for first time

By Bridging Loan Directory 20th August 2019

Right to buy was amongst the most-searched-for residential lender criteria by brokers for the first time in July according to criteria search specialist, Knowledge Bank, in its monthly criteria tracker.

This follows Boris Johnson’s hints earlier this month that he wants to extend right to buy to housing association tenants – after previously suggesting that it had no place in modern housing policy – so could be one to watch, over the next few months.

Interest-only also made an appearance for the first time in a year, possibly due to a number of new launches in the sector in July. Cambridge Building Society launched its first ever Retirement Interest Only (RIO) product, while Leeds launched a new 15-year fixed rate RIO. Leeds also amended its lending criteria to allow for the use of income drawdown pensions and SIPPs when assessing borrower affordability.

Other search highlights include ‘payday loan’ appearing for the first time in the second charge sector, and ‘British national working overseas or offshore’ revealed as one of the most popular searches within self-build for the first time.

Commercial property was in the top five within bridging for the first time since August 2018 while ‘commercial’ made an appearance in the top five buy to let searches for the first time in 11 months.

Knowledge Bank holds over 91,000 criteria from over 200 lenders and brokers can search on unlimited criteria conditions for each customer. There have been an outstanding 28,524 changes to mortgage lending criteria in the first half of 2019, illustrating just how much criteria systems such as Knowledge Bank are needed.

Criteria Activity Tracker – Top five searches performed by brokers on Knowledge Bank during July 2019:

	RESIDENTIAL	BUY-TO-LET	SECOND CHARGE	EQUITY RELEASE
1	Maximum Age at End of Term	First Time Landlord	Maximum Loan to Value	Grade 2 listed buildings
2	Self Employed – 1 Year Accounts	Lending to Limited Companies	Mortgage or secured loan arrears or defaults	Ex-local authority houses
3	Defaults – Registered in the last 3 years	Minimum Income – Interest Only / Part and Part Single Applicant	Capital raising – business purposes on second charges	Solar panels
	Right to Buy	Requirement to be a Homeowner	Mixed-use properties/part commercial	Ex-local authority flats
5	Interest-only	First Time Buyers	Payday loans	Non-standard construction

	SELF BUILD	BRIDGING	COMMERCIAL
1	Purchase of land	Maximum LTV for bridging	Maximum loan to value
2	Barn conversion	Regulated bridging	Semi-Commercial Properties
3	Custom-build – lend against/finance purchase of land	Adverse Credit	Commercial investment mortgages
4	Custom build – flexible stage payments/release/tranche funding	Second charge loan	Minimum loan amount
5	British national working overseas or offshore	Commercial property	Capital raising

Nicola Firth, pictured, CEO of Knowledge Bank said:

“Our tracker reveals a few shifts this month with interest-only making an appearance in residential searches for the first time this year, most likely as a result of a several new products and criteria changes to this sector. It was outstanding to discover that we have seen almost 30,000 mortgage criteria changes year to date, which just goes to show the pace at which our industry is making changes.

“No matter how many mortgages they place, it’s simply not possible for any broker to remember the 91,000 pieces of criteria, let alone keep pace with the 28,524 changes we’ve had already in 2019. Our monthly tracker proves just how much what a broker is searching for alters on a monthly basis. To remember criteria changes across all the different fields that a broker has to search is impossible. Even the best help desks would struggle to update this many changes to a spreadsheet in six months, without a team of people working on it full time. Knowledge Bank is in the fortunate position that it is updated by the lenders rather than staff in a club or network or the brokers themselves.

“It is clear, brokers not using the systems are either spending a lot of their time chasing down the answers or possibly not always giving the best advice they could, as they are not fully aware of what all of the options were at the time the advice was being given.

“From a compliance perspective, the latter is an extremely frightening prospect!”