So, have the larger lenders, almost understandably, been concentrating on process efficiency and streamlining at the expense of responding to the growing market for “non-standard” or “specialist” mortgage lending?
I had the pleasure of attending the British Specialist Lending Senate the other week and was impressed by the enthusiasm and apparent flexibility of the new lenders coming to this market. I can see huge benefit to mortgage intermediaries of having access to these new lenders – either through a master broker or directly, in order to be able to find solutions for the odd cases and opportunities which turn up on their doorstep from time to time. Solutions for issues such as credit impairment sure, but also for self-build development finance, for office to residential conversions, for corporate buy to lets and even finance for auction purchases.
Some of these markets which were discussed I have to say I had not fully appreciated actually existed, but this sector can clearly support mortgage intermediaries and reduce the number of times they have to say, “Sorry, I can’t help”.
Meanwhile, having spent fortunes on revising their operations and systems to cater for MMR and MCD, the larger lenders can continue to drive down the cost of processing standard mortgage deals. But perhaps what they should now be building is the ability to handle business from what are currently market niches but which in future could become mainstream.
Just think back fifteen years or so to see how buy to let lending has grown. Who would have thought then that by now, some 20% of the mortgage market would now be in this sector ? Some places to start might be in the self-employed market, or around interest only or looking at the huge opportunities presented by later life lending.
One size may have fitted all in the past, but in this newly demanding consumer age, much more flexibility is needed.