The latest data from Knowledge Bank’s monthly criteria index has revealed that the speed and scope of criteria changes across mortgage product categories shows no signs of slowing down.
During October lenders continued to withdraw and re-price products on a daily basis and criteria changes followed a similar pattern.
As a result of political and financial instability many products were in freefall and brokers were searching frantically to find lenders who would accept their clients with price and product type playing second fiddle to securing a mortgage offer; any mortgage offer.
Criteria changes were flying thick and fast throughout October as were the most common criteria searches performed by brokers on behalf of their clients.
The criteria index shows that in the residential sector the most popular criteria searched for was the maximum age at the end of the mortgage term for the 5th month in a row as borrowers look to stretch their payments over the longest period possible. Making a move up the top five in October was the search for Interest Only deals which moved up a place to 4th displacing the search for self-employed clients for the first time since June 2022.
The buy to let sector had more criteria changes than any sector aside from residential and the headline change was the search for ‘holiday lets’ breaking into the top five most common searches for the first time in 2022.
It was all change for criteria in the secured loan sector with four of the top five searches new in October. The most common criteria searches were all focused on stretching borrowing requirements, the top searches by brokers were for the maximum age at the end of the term, minimum income required and the maximum age at application.
Criteria searches in the bridging and commercial sectors offered some level of stability with the top five searches consistent with the month before, the only exception being the search for commercial investment mortgages entering the top five commercial searches for the first time this year.
Knowledge Bank CEO Nicola Firth said, “I think it’s fair to say that during August and September brokers endured the greatest period of mortgage market uncertainly for many years and the merry-go-round of criteria changes were something of a blur. During the leadership election and the period surrounding Liss Truss’ rise and fall from power the mortgage market simply didn’t know what the future held. As a consequence we endured a huge amount of criteria changes as lenders tried to establish the credit worthiness and financial profile of future borrowers only to find their models destroyed as taxes and policies were changed and then changed again.
“Although lenders and brokers are able to act quickly and as the financial outlook becomes more stable the merry-go-round of product and criteria changes shows no signs of slowing down so there is tremendous pressure on brokers to stay on top of changes to help their clients jump on or off the housing ladder.”