The word ’niche’ seems to have been lost in translation in the mortgage market.
Inevitably many providers have less capacity and appetite to innovate but even the categorising of niche areas has become hazy.
Historically, niche sectors tended to lead the way when it came to innovation. There are obvious reasons why these have been curtailed but encouragingly, some niche products are returning.
For example, the bridge-to-let we developed has proved popular for its intended target market.
Another niche area, the second charge market, has also received a boost in recent weeks via the launch of a secured loan lender Portal Portfolio which allows borrowers to simultaneously invest in a pension fund and obtain a secured loan.
Initially, the loans will be offered through All Types of Mortgages, which makes sense as controlled distribution remains a key component in the roll out and control of any new product area.Y3S has also just launched a lifestyle loan for couples buying property who need finance for home improvements.
Only clients with full-time employed positions will be considered and an income and expenditure assessment will be carried out to ensure the borrowers can afford to repay the loan.
Such innovation is great and should be welcomed by the market. Even if it may only be applicable to a small proportion of clients, let’s hope that niche continues to make a much-needed return.