Acceptance overtakes price in broker queries as cost-of-living crisis continues

Over recent months the focus for mortgage applicants has shifted from price to acceptance as the cost-of-living continues to impact lenders’ affordability calculations.

Knowledge Bank's criteria index shows that in the residential sector the most popular criteria searched for was the maximum age a borrower could be at the end of the mortgage term. This was the sixth month in a row that this was the most popular criteria searched and reinforces the view that even though interest rates still remain relatively low, borrowers are looking for the maximum length of time to repay their mortgage.

The second most popular search, once again appearing in the top five for the past six months, was brokers looking for lenders for their self-employed clients.

The buy-to-let sector continues to lead the way in changes and tweaks to criteria as lenders take a longer-term view on the financial security of both landlords and tenants. In the top spot this month was brokers searching for lenders who will lend on buy-to-let loans for limited companies and, once again, it is the search for lenders accepting first-time landlords that comes in a close second. This search, when looked at in conjunction with the third placed search for the ‘requirement to be a homeowner’, shows that even those who have yet to have a property of their own are keen to enter the housing market with a buy-to-let.

The secured loan sector has had another busy month of criteria changes and the search by brokers for the maximum LTV allowed continues to be the most popular search. There is however some cause for caution as for the second month in a row the search for lenders who will allow capital raising for debt consolidation is in the top five searches.

Knowledge Bank CEO, Nicola Firth, said: “For a supposedly quiet month when everyone is meant to be on holiday August was one of our busiest for criteria and product changes. Lenders kept a close eye on external economic factors and how this affected a borrower's ability to repay a loan and adjusted their criteria accordingly. The consistency of the most popular searches being performed by brokers month on month suggests that they are still trying hard to place cases and in some cases re-broking a mortgage application as lengthy completion times means mortgage offers run out. For brokers this doesn’t mean simply re-submitting the same application as their client may now fall outside of revised criteria.”