Research carried out for Kensington of 100 mortgage advisers found that nearly two-thirds of respondents expected new specialist lenders to open for business in the next two years, while 13% anticipated that high street lenders would target the sector.
Around half of advisers said that 20% or more of their clients would benefit from applying to a specialist lender, with a number of brokers explaining that their clients have had trouble proving their income in the past year.
However, more than a third (37%) of respondents said capacity to lend could constrain the market’s growth.
Brokers pointed to high street lenders as the biggest barrier to the expansion of the specialist market; just over half (52%) said rates were the major issue, while 47% said regulation would be the biggest block to growth in the specialist market.
Steve Griffiths, head of sales and distribution at Kensington, said: “Industry figures show that intermediary market share is increasing and we expect the significance of the specialist market to grow.
“Kensington’s experience over 20 years shows that homebuyers and remortgage clients do not all fit high street criteria and while they will be entirely creditworthy may have issues with proving income which applies to the self-employed and also those in full-time jobs.”
He added: “The focus on rates is important but there is also a real need for advice and individual underwriting which is why Kensington will be investing in providing support to brokers to help them identify and place specialist cases.”
