The biggest change in criteria search terms by brokers was registered in the second charge mortgage market during December, according to new data from Knowledge Bank.

The findings revealed that “Maximum loan to value (LTV)” and “Child benefit” were the only two constants from November’s top five searched terms in the second charge category.

The second highest searched criteria by brokers was “Defaults – unsatisfied”, which Knowledge Bank suggested could mean clients with a history of missing payments are looking to take out a second mortgage. This could be to secure unsecured debt against their home and reduce the level of interest they are paying, the criteria search expert said.

Knowledge Bank is the largest database of mortgage lending criteria in the UK, and its monthly criteria index shows the terms that brokers have searched for in categories that include the residential, buy-to-let, second charge, equity release, self-build, bridging and commercial sectors.

“Self-employed with one year of accounts” was among the top five most searched terms in the second charge market for the first time since July, which the criteria search specialist suggested may be a result of freelancers looking to use equity in their home to secure debts or to redevelop, potentially seeking a home office to work from.

The data also showed that “Furloughed worker” and “Soft footprints at the decision in principle (DiP)” stage were still of interest for brokers and their clients in the residential market. Both of these criteria featured in the top five most searched terms, as they did in November.

Knowledge Bank suggested that continued interest in soft footprint applications in residential searches may be connected to the furlough scheme, as clients with lower credit scores are looking for applications that will not harm their chances elsewhere.

“The market is again shifting quickly in response to the changing environment,” commented Knowledge Bank lender relationship manager, Matthew Corker. “Confidence has been building with the number of 90% LTV products available increasing in the residential market.

“This confidence may have been due to the approval of the vaccines and it remains to be seen if the latest lockdown will dent this fragile confidence.

“The increase in interest in defaults in the second charge market shows there is a trend of those with missed payments potentially looking to secure debt against their property. This combined with the interest in soft footprints and furlough shows there are a lot of brokers working with clients who may be struggling financially.”

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