Knowledge Bank’s February criteria index has shown a number of surprise results with some sectors experiencing unprecedented change, the firm said.
In the equity release sector all the top five most popular searches in February were new, the first time that this has happened in over 12 months. The most popular search was by brokers seeking the minimum age of the applicant the lenders would accept. In a close second place was brokers searching for lenders offering an equity release inheritance protection guarantee. Although this criteria has been often searched for in the past, this is the first time it has broken into the top five.
Brokers looking for lenders offering the maximum age at the end of the term was once again the most popular search in the residential mortgage category. New additions to the top five this month did include the search for lenders allowing joint borrowers for a sole proprietor and a search on income multiples for affordability assessment.
Second charge loans saw two new additions to their most popular searches in February. These were for lenders allowing CCJs registered in the past three years and existing secured loan or mortgage arrears or defaults. knowledge Banks said the rise in searches for lenders allowing these criteria conditions suggests a worsening arrears picture within the secured loan sector.
It was a far more settled picture in the buy-to-let category with four of the top five searches consistent with the previous month. The new addition to the most popular searches in this search was for first time buyers.
The commercial sector was another that enjoyed some stability in clients’ needs with four of the top five searches consistent with the previous month. Brokers’ clients are continuing to task them to find the maximum LTV permitted and also to accept semi-commercial properties.
There were changes to the most common searches in the bridging category in February with development finance coming in at third spot. The search by brokers for lenders offering development finance hasn’t been in the top five searches since November 2019.
Matthew Corker, lender relationship manager from Knowledge Bank, said: “February really threw up some surprising results, most notably in the equity release sector where it was all change. The extent and speed of change in the criteria needs of borrowers from month to month shows just how essential it is for brokers and lenders to adapt to changing demands.
“We work with lenders every day to help them use this data to evaluate the market and adapt their criteria accordingly. Because criteria searches happen at the onset of the advice process, prior to any product sourcing, it presents lenders with a unique opportunity to adapt to a changing market and drives change and innovation.”