Specialist mortgage lending was £17bn in 2016, up 240 per cent from lows of £5bn in 2009, according to the Intermediary Mortgage Lenders Association.
A new IMLA report says specialist lending has grown 19 per cent every year since 2009.
The trade body’s report says it seems ” specialist lenders are now in a position of strength following the market’s turbulent past”.
The report adds this growth since the financial crisis is largely due to specialist lenders serving markets that have had less and less attention from mainstream lenders.
This is due to tougher regulation brought in post-crash that reduced mainstream lender appetite for non-standard loans.
IMLA’s report suggests the outlook for specialist lenders is positive.
The firm says market and economic conditions mean demand from non-standard borrowers is set to stay high.
This is partly due to the rising influence of brokers. IMLA says more brokers analysing the whole market means smaller lenders getting a better chance of competing.
IMLA also suggests there is “substantial” unmet demand for specialist lending.
The trade body notes specialist lending levels are far below those of the pre-financial crisis era.
It also points out that the number of UK self-employed people has risen to 4.8 million people in the UK.
Meanwhile the number of county court judgements issued against consumers in England and Wales has hit record highs.
Both of these factors may restrict consumers’ access to mainstream lending in the future.
IMLA executive director Peter Williams says: “Through innovation and flexibility, combined with strong underwriting standards, specialist lenders have capitalised on the growing demand for products like specialist residential and lifetime mortgages.”
He adds: “There is strong evidence to suggest that specialist lenders can now break the cycle that has defined the segment in the past.
“The range of borrowers who qualify for a mortgage on standard mainstream terms will remain restricted, and the mortgage market is also becoming increasingly intermediated.”