Some 72% of brokers have said the specialist mortgage market presents a “bigger opportunity” than it used to, a study from a lender revealed.
A white paper produced by United Trust Bank (UTB) looking at trends in the market found that two-thirds of brokers were already writing more specialist mortgage business than they were a year ago.
Further, 74% said specialist cases were more likely to come from new clients than existing ones.
Of the 130 brokers polled, 81% said they were seeing more clients with financial blips and adverse credit, such as defaults and county court judgments (CCJs).
The impact of the cost-of-living crisis was noted by respondents, as 77% said their specialist clients had been more affected by this than the mainstream ones.
People with non-standard employment or incomes were also coming up against challenges, as 72% of brokers said it was harder for their self-employed clients to get a mortgage than it used to be.
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However, uncommon incomes might be getting more popular, with 84% of brokers saying their clients’ incomes had become more complex.
The majority of respondents – 87% – said it was common for clients who came to them to have been rejected by a high street lender first.
More work going into specialist mortgage cases
The study found that 91% of brokers spent more time dealing with specialist cases than mainstream ones, while there were mixed feelings on whether it was harder to source a specialist residential case. Some 28% said it was easier to source this business, while 30% said it had become more difficult.
Despite some of the difficulties a segment of respondents noted, 82% said they preferred to submit cases directly to a lender, while just a tenth liked to use a packager.
The research included interviews with Stephanie Charman, group partnerships and propositions director at Sesame Bankhall Group, Liz Simms, managing director of Connect Mortgages, William Lloyd-Hayward, COO of Brightstar Financial, and Matthew Arena, group managing director at Brilliant Solutions.
It also featured independent research from the Office of National Statistics (ONS), Registry Trust, UK Finance and the Insolvency Service.
Buster Tolfree (pictured), director of mortgages at UTB, said: “This report illustrates just how much the specialist mortgage market has evolved in such a short period, albeit with significant economic factors pushing it along.
“Specialist mortgage lending has certainly increased in importance, and its place in the market is only going to grow. For many customers, it will be their only route to reaching their property-owning aspirations – particularly as mainstream lenders are more frequently unable or unwilling to serve borrowers with more complex needs.”
He added: “The lender community can do more to help brokers recognise and then take full advantage of the opportunities the specialist lending market has to offer, and my colleagues and I at UTB are committed to doing just that, recognising that we achieve more if we work together and that, united, we go further.
“A huge thank you to Jeff Knight for undertaking the research and to the brokers and industry experts who gave up their valuable time to share their valued opinions and insight. We really appreciate it.”
