Seconds, bridging and commercial finance will be important adviser tools in 2021 – Westley

Instead, understanding how much is beyond your control, puts greater emphasis on planning and implementing those things that you can change.

So, when it comes to 2021, think about what steps you can take to make your business more diverse and resilient to external changes.

Are there products and services that you could offer which would help you to better serve your clients? And is there a way of accessing those without diluting your core areas of business?

Whether or not the market continues at its current pace into next year remains an unknown, but we do know that the events of 2020 will impact the demand for finance and the way that people borrow money in 2021.

For example, in the residential market fewer people will be able to claim to have vanilla circumstances, and the role of specialist lenders and their expertise in individually underwriting applications will continue.

Other trends too, should drive demand for particular types of products.

Second charge mortgages

Data from Rightmove has shown that as a consequence of being locked down home movers now want more space than they did previously, and so do homeowners.

Home improvements and extensions are expected to be popular in 2021, and a second charge mortgage can prove a cost-effective way of financing the work.

Second charges can also prove a good choice for some people who want to consolidate debt and may prove a useful tool in helping clients to lower their monthly payments and organise their finances as we emerge from the pandemic.

A trend we have seen in the second half of 2020 is the scarcity of products in the first charge market available up to higher loan to values (LTVs).

This is also an area where second charge lending can help, with some lenders offering opportunities to capital raise that might otherwise be limited by the LTV limits of a first charge lender.

Bridging finance

If there is one product that is well suited to provide fast and flexible funding in a quickly changing environment, it’s bridging finance.

Whether it is to save a transaction, secure a quick purchase, buy a run-down investment property or release capital for business purposes, bridging used properly can be a versatile tool for any broker and will prove an important product next year.

Commercial finance

At some point, government support packages and loans for businesses will end, but it’s clear many businesses will continue to require access to capital – so it’s anticipated there will be high demand for commercial finance in the next year.

This provides you with an opportunity to speak to your self-employed clients, not just about their mortgage requirements, but also their business finance.

These are just three areas of potential opportunity for brokers in 2021, that could provide additional and important streams of income.