December was again a month of “great uncertainty” for broker criteria searches as they looked to place cases for clients, says Knowledge Bank.  

In the residential sector, the most popular criteria searched for was again ‘maximum age at the end of term’, while the search for lenders allowing ‘joint borrowers, sole proprietor’ jumped to second place, according to data from the search firm’s monthly Criteria Activity Tracker.   

It adds that ‘self-employed with one year’s accounts’ dropped to third place, while the search to place clients who have had ‘missed or late payments’ remained in the top five for the fourth month in a row “suggesting the effects of the cost-of-living crisis is still being felt by borrowers”.  

The data comes in the wake of former Chancellor Kwasi Kwarteng’s September mini-Budget, which accelerated already rising mortgage rates. Action taken by current Chancellor Jeremy Hunt in October and in the November Autumn Statement calmed markets, although home loans remain elevated.   

The study says the buy-to-let sector saw “a shake-up in the top five searches” with ‘lending to limited companies’ rising to the top spot, pushing ‘first-time landlords’ into second place.   

Other popular searches in the BTL area were for ‘minimum income required’ and the requirement for the ‘borrower to be a homeowner’ along with ‘first-time buyer’.   

Criteria searches in the equity release sector also saw changes with ‘maximum age at application’ being the most popular search during December. The search for lenders allowing an application from a ‘married couple in a single name’ was the second most popular search holding its place in the top five for the fourth month in a row.   

The second charge category was quieter last month where the most popular searches were for ‘maximum loan to value allowed’ and ‘minimum loan amount’, took first and second spots, respectively.  

The survey says: “The second charge category has been the most consistent throughout the year with the fewest changes in the top five of all the lending types.”  

Searches for bridging loans in December focused on ‘minimum loan amount’, ‘regulated bridging’ and ‘maximum LTV’, these searches made up the top three spots, respectively.  

The most common search for commercial loans was for ‘minimum loan amount’ followed closely by the search for lenders financing ‘semi-commercial’ properties.    

Knowledge Bank chief executive Nicola Firth says: “The year ended as it started with a raft of changes across all lending types.   

“Advisors have had a tough year with processing and completion times being extended which slowed commission payments and, in some cases, meant that mortgage offers ran out and had to be re-brokered.   

“In a period of such instability and change it is even more crucial that brokers avoid declined applications where clients think they qualify for a product only to fail the lender’s criteria requirements. This is hugely frustrating and completely unnecessary if a criteria search has been performed prior to a product search.   

“Early indications are that 2023 will continue to be a lending landscape of great uncertainly and so brokers need to use all the tools at their disposal.”