In Focus: Home ownership  

Mortgage network sees increase in adverse credit queries

Mortgage network sees increase in adverse credit queries

Primis mortgage network has flagged an increase in queries to its product desk in the third quarter of this year, with adverse credit being a common reason for broker calls.

The network has seen an increase in calls of almost 10 per cent, reporting a total of more than 8,300 calls for the third quarter of the year - 707 calls more than the previous quarter.

In particular, the product desk saw a large proportion of queries relating to mortgages for those with adverse credit. 

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Primis highlighted that this uptick in queries relating to adverse credit suggests that broker guidance on the most suitable products for this group of customers is particularly important at this time of high inflation. 

Overall, the Primis product desk assisted brokers with 23,700 queries between September 2021 and September 2022.

Primis proposition director, Vikki Jefferies said the high number of calls show how important advisers are at this time. 

“Despite the cost of living increasing significantly, along with rising inflation levels and interest rates, these statistics show that demand remains healthy, and advisers are being approached for information on how their clients can best navigate the market at this difficult time,” Jefferies said. 

The network also reported an increase in calls relating to self-employed mortgages, an area that has become more complex in recent years as lenders tightened their lending criteria. 

Elsewhere, there was more calls relating to income to affordability criteria, particularly for first time buyers and other queries relating to family assist mortgages. 

Primis commented that rising house prices and cost of living pressures has meant family support is now a very plausible option for first time buyers, with many enquiring about deals.

The uptick in activity came in the same period as the "mini" Budget which plunged the mortgage market into turmoil and forced lenders to withdraw hundreds of products.

Since then, lenders have begun bringing products back to the market but borrowers have been left facing significant interest rate hikes.

However, this week lenders started to reduce their rates, some by as much as 0.50 percentage points, as gilt yields, swap rates and the price of natural gas all begin to trend down.

Yesterday (October 25), Santander and Accord announced rate cuts by up to 0.50 and 0.53 percentage points, respectively.