Furloughed Workers Are Increasingly Seeking Broker Support for Mortgage Applications

New research suggests that residential mortgage brokers are conducting more searches on behalf of furloughed workers than at any time since the height of the initial UK lockdown. According to a report published this week by Knowledge Bank, the term ‘furloughed workers’ is once again within the top five searches being carried out by brokers for residential mortgage customers.

This suggests that the chancellor’s confirmation of the extension of the furlough scheme has encouraged many prospective home buyers and those interested in remortgaging their properties to go ahead with their plans, despite the economic impact of the second lockdown.

Brokers are reporting a wave of interest from borrowers unable to qualify with conventional High Street banks, the vast majority of which make it extremely difficult for furloughed workers to obtain a mortgage or refinance their home. Use our mortgage calculator in the UK to find out just how much a mortgage would cost you.

There’s also evidence to suggest that the impending end of the temporary stamp duty holiday is motivating many to take action in order to save thousands of pounds on the purchase of their property.

‘Soft footprint at decision in the principal stage’ search volumes up

Other popular search terms among mortgage brokers once again within the top five indicate that customers with low credit scores (or concerns about their credit history) are also approaching brokers for help in growing numbers. Soft footprint DIP searches are ideal for those who have reason to believe their application may be rejected, to subsequently protect their credit score from further harm if they are refused a loan or mortgage.

Interest in the government’s Help to Buy scheme also remains elevated, according to the figures from Knowledge Bank. The lender also reported elevated numbers of ‘first-time landlord’ searches among brokers in the buy-to-let market, along with the first ever entry of ‘first-time bridges’ within the top five searches conducted.

Impressive overall market performance

Despite the obvious complications the sector faces at the moment, the figures from Knowledge Bank suggest that the market is performing better than most could have realistically predicted.

“The only constant at the moment is change. With the furlough scheme back, discussion around an extension to the stamp duty holiday, and record numbers of mortgage approvals, the property sector continues to move at a rapid pace,” commented Matthew Corker, lender relationship manager at Knowledge Bank.

“Some trends are continuing, with max LTVs again being a hot topic. Lenders are responding, and in November, many LTVs were gradually increased back to pre-Covid-19 levels; however, an increase in new broker searches such as soft footprint DIP and ‘First Time Bridgers’ shows how the market is constantly changing.

“Lenders are constantly adapting criteria to keep up with the evolving market. It is now physically impossible for any mortgage broker to keep all the different criteria in their heads. So, it is now more important than ever for brokers to use a comprehensive criteria search system to ensure they can provide their clients with the best advice and evidence that they have done so.”