Buy-to-let accounts for four in 10 criteria changes in July

'Lending to limited companies' trends up in broker searches

Buy-to-let accounts for four in 10 criteria changes in July

Research from criteria search specialist Knowledge Bank has shown that of the 1,500 criteria updates on its system in July, almost 40% were in the buy-to-let sector.

Within the ever-changing buy-to-let sector, the most searched for criteria was ‘lending to limited companies’, followed closely by brokers searching for lenders who would accept first time landlords. Knowledge Bank noted that the housing market remains an attractive home for long-term investment, even if potential landlords are not already on the housing ladder themselves. 

After buy-to-let, the second most common criteria changes were in the residential sector with 30% of the month’s changes. This was followed by bridging with 23%.

Knowledge Bank said criteria searches in the residential sector continue to focus on stretching out loan term, with brokers’ favourite search once again being for the maximum age at the end of the term. The main change in residential criteria is the rising popularity of searches for lenders accepting self-employed borrowers with just one year’s accounts.

In the bridging sector, brokers’ top search was for lenders offering regulated bridging to their clients. The mortgage criteria search platform pointed out that with inflation expected to rise further and interest rates certain to follow, clients are keen to secure properties as soon as possible and take advantage of the remaining lower rate deals. It added that, for the first time since February, brokers have been searching for lenders accepting heavy refurbishment, suggesting that bigger projects are being undertaken.

Although there were fewer criteria changes in the commercial sector than others in July, Knowledge Bank said the search for products allowing a commercial owner occupier entered the top five for the first time in three months. The top search was once again for lenders offering commercial loans on semi-commercial properties, suggesting that the reshaping of the high street and retail versus residential continues at a pace. 

“July was another hugely busy month for criteria changes and our dedicated team worked flat out with lenders to keep up with the changes,” Nicola Firth (pictured), chief executive at Knowledge Bank, said. “The standout sector for change in July was buy-to-let and a raft of product and criteria changes flooded in each day.

“There has also been a huge shake up in the bridging sector which saw almost a quarter of all criteria changes in the month. Bridging lenders continue to innovate and it is one of the most fluid sectors in the market. This makes it highly adaptable to political and economic change and brokers need to keep a close eye on changes which are happening daily.”

Firth stressed that with reports of completion times becoming longer, coupled with rates rising, it is imperative that brokers don’t waste time on failed applications by determining at the outset which lenders will accept their clients by checking criteria conditions prior to a product search.