You are here: Home -

Specialist residential mortgage sector set to grow threefold by 2030 – Together

by:
  • 16/08/2022
  • 0
The UK’s specialist residential mortgage market is expected to grow over the next eight years with its value more than tripling from £5bn to £16bn.

According to specialist lender Together, this will be driven by changing employment and working patterns causing people to fall outside of traditional mortgage criteria. Things like the rise of the gig economy, flexible working and the non-nuclear family will result in a change in housing needs, the lender said. 

Also, the shorter-term risk appetite of mainstream lenders is expected to tighten as the impact of the cost of living and inflation becomes apparent. 

The study, carried out in partnership with economist Dr John Glen, also suggested that the market would grow by 56 per cent and process up to 500,000 mortgage applications. This is set to double the share of the specialist sector to four per cent of the UK market. 

Alongside this, Opinium conducted a study of 7,000 consumers for Together. It found that in 2021, just seven per cent of people had taken out a mortgage with a specialist lender. 

Some 52 per cent of respondents fell into the non-standard mortgage category but when looking at the segment who had mortgages with specialist lenders, this rose to 62 per cent. 

Of those who had been rejected for a mortgage, 22 per cent said it was because they had an atypical income. Some 21 per cent cited being aged 55 or over, being divorced or having thin or impaired credit as the reason they were declined a mortgage. For 26 per cent, being in a non-standard buying situation such as shared ownership was the reason for their rejection while for 12 per cent, it was wanting to lend against a non-standard property. 

Together said the limitations in mainstream lending criteria needed to be resolved to meet the government’s housing targets. If its predictions for the specialist mortgage market are realised, Glen suggests a fifth or 100,000 applications will come from people who have not had a mortgage before. 

This was also hinted at by the Opinium survey which found 13 per cent of respondents had never applied for a mortgage due to the assumptions they would be rejected or ineligible. 

Glen said: “At a time when the government is seeking to extend homeownership, this study shows that as many as half a million future applicants could be locked out of the mortgage market without the support of specialist lenders. This highlights systemic issues with the mainstream mortgage process which currently bars many potential buyers who have non-standard criteria.” 

Gerald Grimes, group CEO designate at Together, added: “Our research into the residential mortgage market highlights the growing need for specialist lenders and the problems faced by borrowers who are categorised as ‘non-standard’ in realising their ambitions to own their own homes.  

“The UK’s mainstream mortgage system just isn’t adapting fast enough to how we live. Every year, an increasingly large group of potential homeowners must navigate a needlessly complex, intrusive, and time-consuming mortgage journey, with many facing outright rejection at the end of it.”  

“If our aim is to support ambition and make homeownership more inclusive and achievable, it’s time the industry, supported by the government, rethinks how borrowers can access finance to realise their dreams of homeownership,” he said. 

Related Posts

Tags

There are 0 Comment(s)

You may also be interested in