Criteria search firm Knowledge Bank has reported that interest-only loans have maintained their place in the top five most searched for criteria in August.
Although UK Finance reported that interest-only loans fell by 13% in 2018 there are still a reported 1.7 million active interest-only mortgages. Knowledge Bank said it appears brokers are finding out which lenders will consider their interest-only clients at the very start of the process with a criteria search.
Other activity in the residential sector shows a short-lived appearance for searches on ‘right to buy’ loans which made their first appearance in the top five in July but dropped out of the index in August.
Within bridging, regulated bridging once again rose to the top and maximum LTV fell below searches for minimum loan amount.
Nicola Firth, CEO of Knowledge Bank, said: “We are entering an unprecedented period of change in the country both politically and economically. The mortgage sector has never been more fluid and we can see from these results that product types rise and fall in popularity from month to month. As a result keeping up to date with products and their accompanying criteria has never been more challenging.
“It is worth repeating the startling fact that there were almost 30,000 changes to criteria in the first half of 2019. As Knowledge Bank knows from working with the FCA, the regulator is well aware of the pace of change in our sector. However, there is little doubt that in a market of such product volatility there remains the risk of a tsunami of accusations of inappropriate product recommendations in coming years.
“That is why it is so critical that brokers compile the strongest possible evidence now, during the advice process. In five years there will undoubtedly be sourcing evidence that a ‘cheaper’ product was available but not necessarily the understanding or evidence that the client did not meet the qualifying criteria. Solid compliance evidence of criteria searches is now a business-critical activity.”
