Covid-19 continues to dominate broker searches
Covid-19 continued to dominate the attention of brokers, with ‘Covid-19: Temporary Maximum LTV Restrictions’ featuring prominently across four of the seven categories recorded by Knowledge Bank’s criteria tracker in May. This echoes results in the previous month and reflects the ongoing limits placed on LTVs by many lenders in the wake of the coronavirus outbreak.
In the residential market this was supplemented by a strong showing from ‘Covid-19: Furloughed Workers’, moving up from third position in April to second in May. Clearly, the circumstances in which furloughed workers find themselves are complicated in terms of securing mortgage finance, and many with existing mortgages will be looking to review their situation.
There were also indications, however, that the immediate impact of the virus on the market has begun to recede. In April, brokers also searched in large numbers for ‘Internal/AVM/Desktop Valuations’ in the residential and buy-to-let markets, but this term does not feature in the top five this month. Lenders have adapted and embraced alternative valuation methods, while the announcement in mid-May that physical valuations could resume, has prompted a move to reintroduce higher LTVs.
It was the equity release market that once again showed the greatest volatility, as all of the top five broker searches changed between April and May. Each of the three leading search terms – ‘Married Couple Application in One/Single Name’, ‘Flat Roofs’ and ‘Lodger/Boarder/Rent a Room’ had previously featured in the top five just once in the nearly two years the tracker has been running. This provides fresh evidence that equity release is attracting a wider range of prospective borrowers.
Elsewhere, there was greater stability: in the bridging category, the top five searches remained the same, although ‘Regulated Bridging’ dropped from second to fifth, swapping places with ‘Maximum LTV for Bridging’. Similarly, in the commercial loans market, four of May’s top five were carried over from April, with only ‘Mixed Use Properties/Part-Commercial’ making a comeback.
Matthew Corker, Knowledge Bank’s lender relationship manager, commented: “The market is clearly going through a seismic change, with both lenders’ criteria and borrowers’ circumstances undergoing rapid shifts.
“As the ‘new normal’ begins to take shape, brokers are going to need to have their wits about them – and make use of all the tools they have available – to keep pace with the changes, and continue to provide their clients with the best possible service.”
Brokers wanting to find out more about Knowledge Bank can visit: www.yourknowledgebank.uk
| RESIDENTIAL | BUY-TO-LET | SECOND CHARGES | EQUITY RELEASE | |
| 1 | Covid-19: Temporary Maximum LTV Restrictions | Covid-19: Temporary Maximum LTV Restrictions | Maximum LTV / Loan To Value | Married Couple Application in One/Single Name |
| 2 | Covid-19: Furloughed Workers | Lending to Limited Companies | Covid-19: Temporary Maximum LTV Restrictions | Flat roofs |
| 3 | Help To Buy Equity Loan Scheme | Requirement to be a Homeowner | Defaults – Unsatisfied | Lodger / Boarder / Rent a Room |
| 4 | Maximum Age at End of Term | First-time landlord | Capital Raising for Debt Consolidation | Maximum Property Value |
| 5 | Self employed – one year’s accounts | Minimum Income – Interest Only / Part and Part Single Applicant | Maternity or Paternity Leave | Property with an Annex / Outbuildings / Land / Acreage |
| SELF-BUILD | BRIDGING | COMMERCIAL | |
| 1 | Maximum LTC – Loan to Cost | Covid-19: Temporary Maximum LTV Restrictions | Maximum LTV for Commercial Investment |
| 2 | Add Fees to Loan above Max LTV | Maximum LTV for Bridging | Semi-Commercial Properties |
| 3 | Net Profit in a Limited Company | Minimum loan amount | Maximum LTV / Loan To Value |
| 4 | Maximum LTV / Loan To Value | Minimum Property Value | Commercial Investment Mortgages |
| 5 | Self-employed – one year’s accounts | Regulated Bridging | Mixed-use Properties / Part Commercial |
