It was only last year that I questioned why a significant proportion of intermediaries were not reaping the benefits of specialist lending. However, new lenders, products and solutions have continued to evolve and recent statistics from the Council of Mortgage Lenders revealed that challenger banks and specialist lenders increased their gross lending by some 56% in 2015.
This upsurge in intermediaries using experts in specialist lending for cases they cannot place on the high street suggests that the market is taking note of borrowers’ increasingly diverse requirements, which are developing as a result of taxation, regulation and consumer behaviour. This increased awareness and acceptance of specialist options also highlights how niche mortgages are continuing to rise in appeal.
However, it is still often believed that bad credit means no lending options. When people with credit defaults, limited employment time, late payments or other debts apply for a mortgage and are declined, they often think there are no options left. This is certainly not the case. The specialist lending market recognises and understands that not everyone can have a perfectly clean credit record, nor can everyone show income via payslips or completed tax returns. A one-size-fits-all approach is no longer sufficient.
Borrowers must be informed that there are options available to them and that if they are thinking of getting a mortgage or remortgaging and have an issue with their credit file or are on an interest-only mortgage for example, they shouldn’t assume that they can’t get a mortgage because they do not fit the ‘typical’ criteria of the high street.
Interestingly, in December 2013, the number of mortgage products available passed 12,000 but in the past two years alone, this has increased sharply by a staggering 86%, highlighting how matching a client’s needs to the best mortgage products available is more important than ever.
The specialist lending market has taken huge steps in recent years and it must now continue to diversify to ensure it caters for those who have unusual circumstances such as funding requirements and income type, to the type of property they are looking to purchase.