Brokers' searches show impact of cost-of-living crisis

Terms related to financial woes among the most searched

Brokers' searches show impact of cost-of-living crisis

The effect of the cost-of-living crisis on borrowers is manifesting in broker searches, data analysis from a mortgage criteria search system has revealed.

Knowledge Bank’s latest criteria tracker results show that brokers are searching for the terms “defaults” and “missed and late payments.”

In March, both terms featured prominently in the most-searched criteria on Knowledge Bank’s search platform. With energy costs increasing significantly in April, searches for terms related to financial woes are likely to increase in the future.

“The volume of searches for both ‘defaults’ and ‘missed payments’ sadly looks like it will continue to build. Increasing energy prices and inflation outstripping wage growth will hit some hard, and, in the following months, we may see more and more struggling to pay bills,” Matthew Corker, operations director at Knowledge Bank, said.

Meanwhile, it also appeared that some borrowers were looking to use second charge loans to consolidate debts, with brokers searching for “mortgage or secured loan arrears or defaults” in March.

Another parallel between the residential and second charge markets is the trend for older borrowers. With a combination of an ageing population and increasing house-prices, “maximum age at end of term” was the most-searched term in the residential market and second-most searched in the second charge market.

Brokers are also working with borrowers who have recently moved jobs, as “time in current employment” is among the most-searched terms in the residential market.

The buy-to-let market is dominated by searches from brokers working with inexperienced landlords. Interest in the rental market from both “first-time landlords” and “first-time buyers” resulted in both terms landing in the five most-searched phrases in March.

Research by Zoopla shows that average rental growth reached a 13-year high at the end of 2021, therefore, interest in the buy-to-let market from both newcomers and experienced landlords looks set to continue.

Read more: Average UK rents reach 13-year high.

“The buy-to-let sector continues to gain interest and lenders are launching new buy-to-let products frequently. Those that are open to working with inexperienced landlords are capitalising on a growing niche in the sector, and more and more lenders may follow suit,” Corker said.

It was also found that “regulated bridging” featured prominently in brokers’ searches in March, marking the fifth consecutive month as the most-searched term.

Knowledge Bank said its popularity may be partly driven by competition in the housing market as buyers use bridging loans to either avoid a chain collapsing when a seller pulls out or to buy a property before their own sells.

Alongside bridging loans for residential properties, brokers are also searching for “commercial property” finance. These loans may be for those looking to repurpose existing commercial spaces, either refitting an office to accommodate hybrid working or adapting a retail space.

“Although regulated bridging continues to dominate searches, the growing number of loans connected to commercial properties is an interesting part of the market. With the changing face of the high-street, some businesses are adapting their premises to accommodate the new way consumers both shop and work,” Corker explained.