||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| ||||||||||||||||||
In Focus Risk
Creeping criteria
Credit worthiness creeps into brokers’ top fi ve criteria searches latest tracker results reveal
Nicola Firth Chief executive, Knowledge Bank
Our new research shows a potentially worrying development in borrowers’ credit worthiness as the search for lenders accepting applicants with ‘missed or late payments’ enters the top fi ve criteria searches in May.
Our criteria tracker reveals brokers’ most common criteria searches to fi nd lenders who will consider their clients. The search for ‘missed or late payments’
follows recent trends in increasing interest rates and the much-publicised cost of living crisis with fuel, food and energy bills rising exponentially for households.
Trending down Although arrears are trending downwards this could serve as a warning of impending criteria tightening. With interest rates rising and household
bills taking up an increasing share of household income, aff ordability looks set to be impacted and lenders will be forced to adapt criteria accordingly. Lenders are very aware that household
incomes are being adversely aff ected by cost of living rises and so are likely to tweak their criteria to ensure a high level of responsible lending. Brokers’ favourite residential loan search
in May was, like the three months preceding it, for the‘Maximum age at end of term’ as borrowers look to extend the life of their mortgage term. Also in the residential loan category, the search for ‘Self-employed with one year’s accounts’ jumps up to second place after only entering the top fi ve last month.
Buy-to-let The buy to let sector continues to be a hive of broker activity and for the third month in a
38
www.CCRMagazine.com
row it is potential ‘fi rst-time landlords’ looking for a lender that is the top search. This is followed closely in second place
The top fi ve searches in the commercial sector had a new entrant in May as brokers searched for lenders who would consider ‘mixed use properties that are part commercial’. This search breaks back into the top fi ve searches for the fi rst time since January
by brokers searching for buy to let lenders who will consider lending to limited companies. The most common search for clients with Bridging needs remained consistent in May with ‘regulated bridging’ taking the top spot followed closely by ‘minimum loan amount’ and ‘maximum LTV’. Like the commercial sector, activity in the bridging sector remained robust throughout May with the number of broker searches increasing month on month. The top fi ve searches in the commercial
sector had a new entrant in May as brokers searched for lenders who would consider ‘mixed use properties that are part commercial’. This search breaks back into the top fi ve searches for the fi rst time since January.
Refl ection Refl ecting on this month’s results we should say that with interest rates and mortgage rates set to rise throughout the year there is an increasing pressure on brokers to secure a product for their client while rates are still aff ordable.
Additionally, with reports of low housing
stock on the market the competition for houses is fi erce and so buyers really need to have their mortgage off er locked and loaded so that they can act quickly to secure their dream property. As the rush for the last remaining low rates
heats up brokers can avoid wasted time in the application process simply be checking criteria conditions prior to a product search. CCR
June 2022
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
