February broker criteria searches conducted using Knowledge Bank show that interest from new investors in the buy-to-let market is on the rise.
The analysis of brokers’ searches in February found intermediaries are working with potential new landlords, and the furlough scheme is still of huge interest in the residential market.
Buy-to-let brokers again reported interest from ‘First-time landlords’. For the tenth month in a row the criteria hit the top five, and in February it was the most-searched term by brokers. ‘First-time buyer’ also featured in the top five most searched for terms by brokers for the second consecutive month.
In the residential market, ‘Soft footprint at DIP stage’ was back in the top five most-searched terms after a month’s absence. Knowledge Bank says this suggests brokers are looking for processes that will not impact future applications, potentially due to clients having lower credit scores. The rest of the top five were unchanged from January, with furlough again top of the searches. ‘Maximum age at end of term’ was again the second top searched term, with older clients looking for finance. There was also more interest from those who are self-employed, with ‘Self-employed – 1 year’s accounts’ in the top five for the tenth month in a row.
The second charge market once again saw an interest in managing debt. Two of the terms in the top five related to debt management. ‘Maximum LTV’ was the top searched term for the tenth month in a row.
In the bridging sector, ‘Second charge loan’ was in the top five for the first time since October 2020. This potentially is as a result of clients turning to second charge bridging loans inject capital into businesses, or make refurbishments in order to prevent disturbing their existing mortgages, Knowledge Bank said.
Matthew Corker, operations director at Knowledge Bank, said: “The rental market in the UK is receiving a lot of interest at the moment. Perhaps as a result of the volatility in the stock market due to the pandemic, investors are turning to what they see as a safe investment. With house prices increasing in the past year and interest in rental properties also on the increase, this trend could be set to continue.
“However, with the government announcing they would back 95% loan to value mortgages, this may help more first-time buyers onto the housing ladder, and may see less looking to rent in the future.
“The furlough scheme was again at the top of the list for brokers in the residential market, and the latest extension to the job support scheme will undoubtably result in more lenders adjusting criteria. The stamp duty extension may bring a raft of new clients to the market. However, they will need to move quickly as even with the extra three months, the deadline is still tight for those who have not already started the process.”
“With these latest government decisions, lenders are certain to continue adapting criteria to keep up with the evolving market. With changes coming thick and fast, brokers could spend hours every day searching for the latest criteria, so using a comprehensive criteria search system can save them a massive amount of time and ensure they are providing best advice.”
