Confidence in the specialist lending market keeps on growing

By Bridging Loan Directory 25th June 2019

New research from Masthaven Bank reveals that specialist intermediaries’ confidence in the specialist lending market continues to rise. Its latest Broker Beat report found that nearly three quarters (73%) of intermediaries working in the specialist sector feel confident about the prospects for the mortgage market, with 89% confident about their own company’s prospects over the next twelve months. These figures show an increase of 12% and 5% respectively from the previous year, suggesting specialist brokers are feeling optimistic about their prospects for the second half of the year.

This is the second iteration of Masthaven’s Broker Beat survey, which collates responses from brokers and is intended to gauge insight and opinions of intermediaries working in the specialist lending market. With 27% of specialist brokers expecting their topline revenue to increase by 10%-20% in the next twelve months and over one third (35%) expecting the majority of this additional work to come from direct marketing and business activity, the intermediated specialist lending market is in a positive mood, despite relatively muted transaction volumes in the mainstream UK housing market.

Confidence among brokers appears to stem in part from the fact they can serve a wide range of potential customers. When asked what customer types brokers expect to see more business from in the next 12 months, nearly half of respondents cited specialist finance (47%), suggesting that ‘specialist’ business is fast becoming the ‘new normal’. Nearly two in ten (19%) expect to see more business from later life borrowers, followed by first-time buyers (14%). There is demand from borrowers of all life stages to have access to products that traditional high street lenders cannot provide, using the breadth and depth of specialist intermediaries’ expertise and their ability to place complex business.

In terms of what intermediaries think matters most to customers when taking out a loan, over four in ten (41%) said low rates, followed by flexible criteria (30%) and speed (12%). Interestingly, customer service didn’t feature as a top statistic this year compared to the one in five (20%) of intermediaries that cited it as a differentiator last year. However, this could be because brokers have now come to expect quality service for them and their customers, rather than it becoming a less important deciding factor. Lending criteria (28%) and the impact of regulation (14%) are both cited by intermediaries as being growth challenges in the market.

Nearly a quarter (23%) of intermediaries said remortgaging is experiencing the most growth, suggesting a growing number of homeowners are seeking to find the best possible deal in a competitive market. This was closely followed by later life lending (20%) and short-term finance (13%). Nearly two in ten (19%) believe property development needs the most innovation in order to meet growing customer demand, alongside later life lending (18%) and buy to let products (15%). This fairly even split suggests there is a belief 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.

The demand for buy to let innovation comes just as Masthaven has announced its revamped product suite for this area of the sector. The specialist lender’s refreshed range now includes more flexible criteria points, rates for non-traditional tenants and landlords and complex properties and is available for individuals, professional landlords and limited companies. This complements the recent changes Masthaven has also made to its short-term lending suite, including reduced rates for the whole of market and an improved refurbishment bridging feature. Both ranges clearly reflect broker and customer demand.

Jon Hall, pictured, Managing Director at Masthaven, commented:

“Despite the ongoing uncertainty facing the UK economy, nothing, it seems, can compete with the resilience or dampen the confidence of specialist mortgage brokers. Instead, Masthaven’s second Broker Beat survey shows brokers’ confidence about the prospects for their own businesses and for the specialist mortgage market as a whole have actually increased over the past year.

“At Masthaven, we offer the broadest range of property related lending products on the market and intend to add to this further throughout the year so that intermediaries feel even better equipped with an array of solutions that can be tailored to their customers’ needs.”

Matt Andrews, Managing Director of Mortgages at Masthaven, commented:

“Any good product comes from solving customer needs and at Masthaven we take this to the next level, developing products that can be both personalised and tailored dependent on your customer’s requirements. Recognising that people don’t fit into pre-determined silos and taking customer feedback on board is what drives the increasing flexibility of products and criteria, alongside an ongoing commitment to underwriting complex cases that we are seeing across the market.”

Jon Hall concludes:

“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. Intermediaries want access to a range of lending solutions – both long and short-term – and should ensure that these are all options available as part of their broker toolkit. Property development, later life lending and the buy to let markets are all areas identified as needing the most innovation to grow – and Masthaven is innovating in each of these markets. The future looks bright – specialist lending intermediaries see no shortage of promising opportunities; and as lenders we should support this over the months and years ahead.”