Brokers upbeat about prospects in specialist lending markets

Confidence in the specialist mortgage market is increasing, with the vast majority of intermediaries working in this sector buoyant about prospects in the year ahead, according to new research. 

Masthaven Bank found that three out of four intermediaries, 73 per cent, were confident about specialist lending opportunities, and almost nine out of 10, 89 per cent, were upbeat about their own company’s prospects over the next 12 months.

These figures show an increase of 12 per cent and 5 per cent respectively from the previous year.

This Broker Beat survey found that almost a third, 27 per cent, of specialist brokers expect their topline revenue to increase in the next 12 months, by between 10 and 20 per cent. 

Confidence among brokers appears to stem from the fact that they can serve a wide range of potential customers. When asked what customer types brokers expect to see more business from in the year ahead, nearly half of respondents cited specialist finance, nearly two in 10 expect to see more later life borrowers, while 14 per cent expect more first-time buyer business. 

In all of these cases these borrowers often struggle to get mortgage finance or advice from high street and mainstream lenders.

Nearly a quarter, 23 per cent, of intermediaries said remortgaging is experiencing the most growth.

In terms of what intermediaries think matters most to customers when taking out a loan, over four in 10, 41 per cent, said low rates, followed by flexible criteria at 30 per cent, and speed at 12 per cent.

Lending criteria, 28 per cent, and the impact of regulation, 14 per cent, are both cited by intermediaries as being growth challenges in the market.

Nearly two in 10 brokers believe property development needs the most innovation in order to meet growing customer demand, alongside later life lending at 18 per cent, and buy to let products at 15 per cent. 

Masthaven says that this suggests there is a widespread believe that greater innovation could drive growth in many different parts of the market  —and lenders will do well to provide intermediaries with the tools, products and services to facilitate this growth.

This more optimistic outlook comes despite relatively muted transaction volumes in the mainstream UK housing market, although remortgaging remains buoyant, thanks in part to competitive mortgage rates.

Masthaven managing director Jon Hall says: “Despite the ongoing uncertainty facing the UK economy, it has not dampened the confidence of specialist mortgage brokers.

“The positive noises from brokers are pleasing to hear, as is the diverse areas of growth identified in the report including remortgaging, later life lending and the short-term markets.” He adds that lenders like Masthaven will continue to innovate to meet this demand.

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