Specialist lending has become the coverall phrase for many industry lending channels that sit outside what is still called the high street. The high street epithet tends to confer a legitimacy of on-message, compliant first charge mortgage business and I think there is a danger in us all thinking that anything outside of that title, is in some way tainted by comparison.
I think we need to shift our thinking and remember that high street lending’s orbit has decayed considerably since the Mortgage Market Review and from being a broad church it has become a very much more select club, where fewer customers qualify to belong.
Unfortunately, one of the consequences has been to put customers and their advisers into a mind set that somehow their cases are in some way second rate and diminished as a result. This is the challenge for today’s specialist lending practitioners.
In reality, the specialist lending market is fluid, dynamic, innovative and diverse. In many ways, the antithesis of the high street, which has become a very vanilla offering relying increasingly on credit scoring and box ticking in order to satisfy its interpretation of what it considers to be the regulator’s requirements.
Lenders as diverse as building societies with long pedigrees of service as well as the newer entrants have been largely responsible for providing alternative sources to the high street. More importantly, they are proving that it is not only possible to provide funding, but also ensure that satisfactory client outcomes are reached.
Affordability is just as much a key component in the specialist lending underwriting mix as it is in the high street. Ensuring that clients can manage new repayment plans is at the forefront of decision making, especially when we are looking at clients who need extra protection or quality advice from the intermediary market.
We all want what is best for the client and need the help of the professional intermediary market to help to continue to evidence and justify to our lenders, regulators, investors and clients why this is good for them all.
The specialist lending market exists because no matter how much the powers that be would like a complete conformity in lending, every case which reaches us is a reminder that every client is different. So instead of wishing clients into a straitjacket of box ticking expectation, we should celebrate the existence of the specialist market as a necessary and vital component in the UK’s domestic lending market.