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

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!”

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