Advisers confident but valuations and seconds a big concern – Shawbrook

  • 19/01/2021
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Advisers confident but valuations and seconds a big concern – Shawbrook
Advisers in the specialist lending sector are generally positive about prospects for the year to come although those with second charge businesses have significant concerns, according to research by Shawbrook.


Two thirds of buy-to-let, commercial and bridging brokers said they were confident about the lending environment for this year with a similar number feeling positive about the growth of their business.

The Shawbrook Broker Barometer also found there was optimism around the economy in general, as 44 per cent of broker respondents said they were either very confident or fairly confident in the future of the UK’s economic state. 

The market’s bounce back once it reopened last year helped to boost the performance of broker firms too.

A third said transaction volumes were currently up by 20 per cent or more compared to the beginning of 2020. Almost one in ten have seen business increase by 30 per cent or more while three per cent reported annual growth of 40 per cent or more. 

Second charge brokers did not fare as well according to the survey, as a third said business levels were down by 30 per cent or more, and almost a quarter had seen a decline of 40 per cent or more. 

A lack of confidence was also evident in the outlook of second charge brokers with 69 per cent saying they were ‘fairly concerned’ about the lending environment this year 

Business growth was also expected to be a challenge as 12 per cent of second charge brokers said they were very concerned about their business performance and 42 per cent said they were fairly concerned. 

Just 19 per cent of second charge brokers were fairly confident about their business this year. 

Feelings towards the wider economy were more positive with this group however, as half felt either very or fairly confident about the UK economy. 


Areas of growth 

Increased investment is expected in 2021, as 62 per cent of buy-to-let, bridging and commercial brokers said they predicted investors to expand their property portfolio. 

As for the segments of the market that are expected to do well, 29 per cent forecast the buy-to-let market to experience the strongest growth this year and a further 29 per cent believed they will see a good performance in bridging business. 

Second charge mortgages and semi-commercial investment were respectively predicted areas of growth for 14 per cent of brokers, while 11 per cent predicted the residential market would do well. 

Furthermore, 42 per cent of brokers working in the second charge market said they expected to see growth in this segment and 38 per cent expected increases in residential business. 


Restriction concerns 

Restrictions relating to the pandemic and lending behaviour were common concerns with all specialist brokers as three quarters of buy-to-let, bridging and commercial brokers believing lending restrictions would impact business while 96 per cent of second charge brokers said the same.

The second main concern for buy-to-let, bridging and commercial brokers was valuation issues, with 66 per cent citing this as a worry, while 69 per cent of second charge advisers were worried about Covid-19 restrictions.

Emma Cox, sales director of property finance at Shawbrook Bank, said: “The optimism among brokers, even in the face of enduring uncertainty while we continue to navigate the Covid-19 situation, is great to see.  

“The growth in business volumes when compared to the beginning of last year imply a robust recovery, which is likely to be fuelling the positive outlook for the year ahead.”  

She added: “Despite the optimistic outlook, as we move further into lockdown 3.0, we understand there are still many brokers facing challenges, which is why it remains crucial for lenders to continue to work closely with brokers over the coming months.” 


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