Searches for maximum LTV mortgages became less common among brokers towards the end of last year, according to Knowledge Bank, as many lenders reintroduced 90 per cent LTV products.
Research from the criteria search system found that November and December were the first months since the onset of the pandemic that maximum LTV was not among the top searched terms by brokers in the residential market.
They were replaced by searches for criteria on furloughed workers and soft footprints at the decision in principle stage.
Matthew Corker, lender relationship manager at Knowledge Bank, said that confidence had been building, with the increasing number of 90 per cent LTV products available in the residential market.
But Mr Corker added: “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.”
Data from Moneyfacts showed there were 88 products available at 90 per cent LTV at the start of December, the highest number since the beginning of June.
Brokers have previously welcomed lenders reintroducing 90 per cent LTV products after a shortage during the pandemic.
While Knowledge Bank warned the recent lockdown may cause some lenders to be more cautious moving forward, HSBC announced it would be expanding its mortgage lending by reintroducing 90 per cent LTV mortgages next week (January 12).
Michelle Andrews, head of buying a home at HSBC UK, said: “The new lockdown will undoubtedly present challenges, but the experience of overcoming numerous difficulties during the original lockdown, for example making more use of automated valuations, will be invaluable.
“We are all seeking a return to normal, although for many it will feel like we may not see that for a while. With us returning to the higher LTV space, hopefully that is a little bit of welcome normality.”
Top five searches performed by brokers on Knowledge Bank during December 2020
| RESIDENTIAL | BUY-TO-LET | |
| 1 | Maximum Age at End of Term | First time landlord |
| 2 | COVID-19 : Furloughed Workers | Lending to Limited Companies |
| 3 | Self employed – 1 years accounts | Minimum Income - Interest Only / Part and Part Single Applicant |
| 4 | Help To Buy Equity Loan Scheme | Requirement to be a Homeowner |
| 5 | Soft Footprint at DIP Stage | Consumer Buy To Lets |
Knowledge Bank said the current searches trend looked set to continue with another lockdown now in effect, and the extension of the furlough scheme until the end of March.
Carl Shave, director at Just Mortgage Brokers, commented: "[The] top five search terms certainly reflect the market we have been experiencing as a result of the pandemic.
"With many potential borrowers adjusting to life with reduced income, including those that have been furloughed, top search terms of maximum age and furlough specific is evidence that enquiries are focused on obtaining mortgages to reduce monthly payments, potentially for the short term until the financial landscape hopefully recovers."
chloe.cheung@ft.com
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