Criteria searches among mortgage brokers have continued to indicate the impact the cost of living crisis is having on the UK, data published by Knowledge Bank has indicated.

The January criteria index shows that in the Residential category the search for “missed or late payments” jumped up the ranking of the top five most common searches to second place.

Another change was the search for “interest only”, which Knowledge Bank’s data revealed had entered the top five this month, suggesting borrowers are looking for ways to keep monthly payments as low as possible.

The UK’s largest database of mortgage lending criteria keeps track of the most common searches performed by brokers as they look to place a client’s case. Knowledge Bank suggested that rising interest rates, changes in borrowers’ circumstances and lenders’ tightening criteria during the cost of living crisis has heaped pressure on brokers to find a home for their client’s mortgage.

Elsewhere, the buy-to-let sector saw the top two searches for “lending to limited companies” and “first-time landlords” retain their places for the second month in a row. However, the search for lenders requiring the “borrower to be a homeowner” rose to the third spot.

Criteria searches in the equity release sector also saw several changes with “married couple application in a single name” claiming the top spot. Knowledge Bank highlighted other changes of interest including the search for “early repayment charges” which, as the third most popular search in January, indicated that borrowers are worried about being tied into a higher rate should prices fall in the future.

Knowledge Bank CEO, Nicola Firth, said that 2023 has started with “an uncertain financial landscape” for many existing and prospective borrowers.

“With the Bank of England base rate rising to 4%, household budgets are being stretched and placing mortgage cases has become increasingly challenging for brokers,” Firth commented. “Lenders continue to refresh products with more regularity than normal, and criteria tweaks are being made in an attempt to adjust to customers' needs.

“It is therefore more important than ever that brokers get it right first time by ensuring that a borrower fits criteria prior to product sourcing and submitting an application.”

Share Story: