Broker searches for furlough friendly mortgage criteria continued to fall month-on-month between June and July, after data from Legal & General Mortgage Club’s SmartrCriteria tool showed a -18% drop.

However, the latest findings also suggest that while the number of people needing furlough friendly mortgages is falling, many borrowers continue to need mortgage options suitable for those with irregular incomes and repayment blemishes.

Demand for lenders willing to consider borrowers with satisfied repayment defaults remained in the top three most sought after criteria points, with searches for unsecured arrears and unsatisfied defaults also appearing in the top 15 most sought after terms.

L&G also revealed that demand for criteria relating to satisfied CCJs also remained broadly consistent by volume month-on-month, while searches for borrowers with bankruptcy jumped by quarter (24%). This was alongside a 10% jump in criteria for borrowers with ongoing payday loan agreements.

While a clear trend for advisers needing lenders suitable for borrowers with credit impairments appears to be emerging, the data also revealed an increase in searches on behalf of borrowers with contract or irregular income. Criteria for borrowers employed via a fixed-term contract increased by 17% in July while general contract worker criteria requests also rose by 14%. Foreign income searches also jumped by 20%.

L&G Mortgage Club head of mortgage transformation and operations, Clare Beardmore, commented: “Our latest data shows that there is still a significant portion of those seeking a mortgage who have financial complications, such as missed payments, or credit impairments.

“Amidst this backdrop of complex borrower needs, the role of advisers in helping clients to access competitive lending options has become ever important and for homeowners across the UK, the need for guidance and support when it comes time to find a new mortgage is clear.

“However, to tackle these more complex cases efficiently, advisers also need to embrace technology, which can help streamline search results and automate process such as affordability calculations.

“With the purchase market expected to normalise over the coming weeks and in the wake of the end of the stamp duty holiday, now is the time to explore the tech options and how they can benefit their business.”

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