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Equity release once again the focus for change in November broker criteria searches

05 December 2019

New figures from criteria search specialist Knowledge Bank point to significant change across the lending landscape, with the equity release market once again leading the way.

While there was more stability in the bridging and commercial markets, broker searches in November also showed significant variation in the residential and buy-to-let categories.

In the equity release category, none of October’s top five searches featured again this month – the second month running and the eighth time this year this has been the case.

The highest-ranked search, for ‘property with an annex/outbuildings/land/acreage’, had also previously topped the search chart in February. In second position, however, was ‘downsizing protection option’ – a search that has featured only twice before in the top five. A number of providers now offer this option so borrowers can avoid incurring early repayment charges if they move.

Another notable new entry was ‘lodger/boarder/rent a room’, a search that has never previously ranked in the top five. As well as an important potential income stream, younger lodgers can also provide valuable company for older people who find themselves living alone, in some cases for the first time.

In the residential category, ‘maximum age at end of term’ held onto the top spot it has maintained since February, but the most telling move was the rise of ‘interest only’ into second place, its highest-ever ranking, pointing to households’ desire to maximise the amount of cash at their disposal.

Meanwhile, although the top three searches in the buy-to-let category remained broadly similar to recent months, new entries in fourth and fifth places respectively from ‘houses in multiple occupation (HMOs)’ and ‘holiday lets’ suggest would-be landlords are looking to profit from increasingly transient demand in the private rented sector.

Criteria Activity Tracker

Top five searches performed by brokers on Knowledge Bank during November 2019

 

RESIDENTIAL

BUY-TO-LET

SECOND CHARGES

EQUITY RELEASE

1

Maximum Age at End of Term

Lending to Limited Companies

Maximum LTV / Loan To Value

Property with an Annex / Outbuildings / Land / Acreage

2

Interest Only

First Time Landlord

Payday Loans

Downsizing Protection Option

3

Self Employed - 1 Years Accounts

Requirement to be a Homeowner

Capital Raising for Business Purposes

Properties close to Commercial Outlets

4

Capital Raising for Debt Consolidation

Houses in Multiple Occupation (HMOs)

Debt Management Plan - Ongoing / Current

Maximum Number of Bedrooms

5

Right to Buy

Holiday Lets

Ex-Local Authority Houses

Lodger / Boarder / Rent a Room

 

SELF-BUILD

BRIDGING

COMMERCIAL

1

Maximum LTV / Loan To Value

Minimum Loan Amount

Semi-Commercial Properties

2

Custom Build - Flexible Stage Payments / Release / Tranche Funding

Regulated Bridging

Maximum LTV / Loan To Value

3

Custom Build - Interest Only during Build

Maximum LTV for Bridging

Minimum Loan Amount

4

Maximum LTC - Loan To Cost

Development Finance

Maximum LTV for Commercial Investment

5

Add Lender's Fees to Loan

Below Market Value Purchase

Commercial Investment Mortgages

Nicola Firth, CEO of Knowledge Bank said, “It’s been a month of massive change in criteria searching with big movements across many lending categories. The equity release market, especially, continues to throw up surprises, with searches rarely featuring in the top five in two consecutive months.

“With lenders’ criteria showing so much change from day to day, it is vital that brokers take advantage of all the tools at their disposal so they can stay one step ahead and continue to give clients the best possible advice. Only by using technology to their advantage can brokers ensure they are getting the best deal for their client.”