“minimum income” was the top search term, followed by ”first-time landlords”, “the six month rule” and “lending to limited companies”.
Nicola Firth, chief executive of Knowledge Bank said that the search results reflect what is happening in the mortgage market. The fact that “first-time landlords” is at number two indicates that despite increased costs for landlords, new investors are still interested in purchasing buy-to-let properties. Not all searches will result in first-time landlords applying for mortgages, but the searches indicate a high interest in people considering starting a buy-to-let business.
The top search term” minimum income” is the result of new affordability rules under which lenders stipulate the minimum income the property must earn. This is expressed as a percentage of the mortgage payments; for example, 145%.
The search words “lending to limited companies” reflect the strategy that portfolio landlords with many properties are adopting. In some cases, forming a limited company to own rented property can save tax.
Firth said that the average search uses over four search criteria, which shows how complex some mortgage cases are. Mortgage brokers have the challenging task of matching lenders mortgage products to a borrower’s requirements. There are many commercial mortgage and residential mortgage products targeted at niche sectors of the market, with brokers able to locate the best suited for their clients.