I spend a lot of my time raising awareness amongst my network of developers, investors, and property professionals about the benefits of turning to specialist options. One of the challenges to the growth of the specialist market is that very few of the lenders in this sector are household names and so there is a job to be done in raising awareness of the options and opportunities, and also instilling confidence amongst customers. This creates a more competitive market and eventually better product choice, increased flexibility, and more favourable terms – which are all good news for borrowers. So, there are plenty of unsaturated markets where challengers can grow, and we are still seeing expansion of existing lenders into new sectors and the launch of new entrants. Yet, with so much on their plates currently, the rate at which mainstream lenders are entering niche markets such as bridging is relatively slow. There continues to be significant demand for finance on HMOs and student lets, portfolio lending and expat lending. One thing that is certain is that access to capital is hugely important for people now and will continue to be so as we move into next year. Much like the global financial crash, when many lenders were able to take market share and develop a loyal client base, these lenders have continued to work with consistency and clarity throughout a very difficult period. Throughout Covid-19, lenders in this part of the market have remained proactive, flexible and willing to find solutions for brokers and their clients. So, what does this mean for the future of the lending landscape?įortunately, there continues to be a growing specialist lending market, with lenders that are able to take a diverse and considered approach to risk to deliver lending to customers who fall outside of the requirements of the mainstream. Set against the current backdrop, it can be increasingly difficult for customers in these segments to secure borrowing as, although they may not necessarily consider themselves to be high risk, they often fall outside the mainstream lending criteria. There has been an increase in later life borrowers for whom traditional maximum age criteria is no longer appropriate, and there is a growing number of people with poor credit history and increasing debt. In recent years we have seen a rise in self-employed workers, and people with irregular income or multiple income streams. However, in an environment of heightened risk this approach can lack the flexibility required to assist borrowers with increasingly complex needs. Mainstream banks are built to deliver lending at high volumes, with largely automated systems and process. In an environment of uncertainty, lenders are more watchful regarding the risk they take on and tend to be more cautious, and this is before you start to consider the dramatic impact of the pandemic on business and personal finances. But, at a time of a global pandemic, we are all much more acutely aware of risk.įor lenders, the same is true of credit risk. Risk is something that is always present in all of our lives – you take a risk every time you cross the road, for example.
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