A sack-full of criteria changes are arriving for Christmas reveals Knowledge Bank
The latest data from Knowledge Bank’s monthly criteria index has revealed that the year looks set to end as it started with continuing criteria changes across the whole range of product categories.
During November lenders continued to react to rising interest rates and although products continued to be withdrawn and re-priced on a daily basis it was lending criteria that witnessed the greatest changes.
The Knowledge Bank criteria index tracks the top five most common searches performed by mortgage brokers during the month to find lenders who will accept their clients.
It was all change for residential criteria in November with the search for lenders accepting self-employed borrowers with just one year’s accounts rising to second in the charts. Other changes saw the search for interest only loans rising to third and the search for lenders accepting missed or late payments dropping from third to fifth place in the charts.
The buy-to-let sector followed the trend with a raft of criteria changes that saw the search for first time landlords the most popular search over the month. The search term of lending to limited companies was knocked off the top spot for the first time in six months.
The most popular search in the secured loan sector was once again for the maximum loan to value as borrowers looked to squeeze the maximum out of lenders. The rest of the top places were taken up by the maximum age, minimum and maximum loan amount and lenders who will allow capital raising for debt consolidation.
Criteria searches in the bridging and commercial sectors offered some consistency as we end the year with the top five searches unchanged for the second month in a row. Regulated bridging and the minimum commercial loan amount took the top spots respectively.
Knowledge Bank CEO Nicola Firth said, “If anyone in the mortgage market was hoping for a period of product and criteria stability then I’m afraid they will have to wait a bit longer. Our team continued to respond to daily changes across all lending types and with interest rate changes now a monthly occurrence brokers need to ensure that they are basing applications on the very latest criteria. Brokers and borrowers know that it is hugely time-consuming and frustrating to complete an application only to discover that a borrower now sits outside of the permitted criteria. As the cost of living and energy crisis continues to have a significant impact on household budgets brokers simply cannot take it for granted that a lenders’ criteria today will be the same tomorrow.”
Criteria Activity Tracker
Top five searches performed by brokers on Knowledge Bank during November 2022
| RESIDENTIAL | BUY-TO-LET | SECOND CHARGES | EQUITY RELEASE | |
| 1 | Maximum age at end of term | First time landlords | Maximum LTV | Timber framed construction |
| 2 | Self-employed 1 year’s accounts | Lending to limited companies | Minimum loan amount | Leasehold remaining term |
| 3 | Interest only | Minimum Income – Interest Only / Part and Part Single Applicant | Maximum age at end of term | Married couple application in single name |
| 4 | Time in current employment | Requirement to be a homeowner | Maximum loan amount | Properties close to commercial outlets |
| 5 | Missed or late payments | First time buyers | Capital raising for debt consolidation | Maximum age at application |
| SELF-BUILD | BRIDGING | COMMERCIAL | |
| 1 | Maximum LTV | Regulated Bridging | Minimum Loan Amount |
| 2 | Lend in Scotland | Minimum Loan Amount | Semi-commercial properties |
| 3 | Maximum loan amount | Maximum LTV | Maximum LTV |
| 4 | Custom build – max loan to cost | Second charge loan | Mixed use properties |
| 5 | Custom build – maximum borrowing / loan amount | Commercial Property | Commercial owner occupied |
