Knowledge Bank’s latest monthly criteria index shows the second charge market saw the biggest change in January.
Out of the four new terms in the top five, three related to managing or consolidating debt, including those with CCJs looking to second charge loans for finance.
The one constant in January was ‘Maximum loan to value (LTV)’ which has been the top searched ‘second charge’ criteria since May 2019.
For the first time since August 2020, ‘Furloughed workers’ reached the top spot in the residential market again. Meanwhile, searches for ‘Joint borrower sole proprietor’ reached the top five most-searched terms in residential criteria for the first time since February 2020.
Last month, ‘First time buyers’ reached the top five search terms in the buy-to-let market for the first time since February 2020. ‘First time landlord’ also remained in the top two most-searched terms for the eighth month in a row. ‘Lending to limited companies’ was the top searched term in the buy-to-let market.
In the bridging market, ‘development bridging’ made the top five for the first time since February 2019. Knowledge Bank said the volume of searches for ‘Development Bridging – Maximum Loan to GDV LTV against End Value’ suggests there are people using bridging loans for major redevelopments. ‘Commercial Owner Occupier’ entered the top five in the commercial arena, potentially to raise funds which then can be re-invested into the business.
Knowledge Bank recorded a record 52,000 criteria changes in 2020, and this January had another 3,000 changes.
Matthew Corker, operations director at Knowledge Bank, said: “As we move into 2021, the mortgage market continues to shift dramatically. There is significant interest in debt consolidation in the second charge market, while the buy-to-let sector continues to attract interest from both potential and existing investors.
“The furlough scheme is at the top of brokers requests in the residential category as thousands of families are, or have now been, affected by being on furlough. Just how supportive lenders will be of those that have been on the scheme is still being established. On the positive side, support from families appears to be helping buyers onto the ladder. This trend looks set to continue despite 90% LTV mortgages coming back to the market, as the average price for first-time buyers continues to rise.
“With the end of both the stamp duty holiday and furlough scheme, lenders are certain to continue adapting criteria to keep up with the evolving market. It is now physically impossible for any mortgage broker to keep all the different criteria in their heads. So, it is now more important than ever for brokers to use a comprehensive criteria search system to ensure they can provide their clients with best advice – and evidence that they have done so.”