Struggling borrowers dominate broker searches in May: Knowledge Bank

The latest monthly criteria index from Knowledge Bank highlights the pressing financial difficulties for many in the UK.

Data from the residential mortgage sector in May reveals an increase in searches related to delayed or missed payments. There is also a persistent trend linked to the maximum age a borrower can be at the end of the mortgage term. Brokers have also seen clients look at extending their mortgage terms to make their monthly payments more affordable.

The search term 'self-employed – 1 year’s accounts' has reclaimed its position in the top five residential searches for the first time since December 2022.

Over the past three months, there has been a noticeable surge in the trend for 'joint borrower sole proprietor' mortgages. Earlier this year, over half of the Londoners who took part in a Zoopla survey admitted they were relying on their parents’ wealth to get them on the property ladder.

The searches in the second charge sector in particular, reveal a notable increase in people looking for answers to their financial challenges. New search entries relate to customers looking for additional finance while having arrears or defaults. Additionally, there was a rise in searches for lenders who will accept people with a debt management plans. This, alongside the number one search for ‘maximum LTV’ indicates that clients are actively reaching out to brokers to help them manage their finances by securing them additional borrowing.

In the buy-to-let sector, ‘no requirement to be a homeowner’ shows some are looking at alternatives ways to purchase and get on the ladder.

For the first time since October 2022, the Knowledge Bank data highlights an increase in demand among holiday let searches.

Knowledge Bank CEO, Nicola Firth, said: “As borrowers face the burden of increasing living expenses and often rising debts, many are crying out for help. Others are being hit especially hard if they are coming off a fixed rate mortgage at sub-2% and facing the prospect of moving on to one that could be three times higher.

“Despite this, it is clear that some are trying every means possible to get on the housing ladder, from taking a ‘joint borrower sole proprietor’ mortgage, to extending payments over a longer term and even looking at buying a rental property before their own home.

“The current economic climate and outlook, again point to the importance and value of mortgage brokers to help both existing and potential borrowers. At the same time we can see just how challenging the market is for brokers, with the need to navigate complex requirements, ever changing rates, and complex criteria. Fortunately, that’s where Knowledge Bank is here to help with our technology playing a pivotal role in helping brokers and their customers. The new Consumer Duty Flags particularly will help brokers identify those who need more support during these challenging times. Also allowing lenders to identify any underserved areas.”