Brokers’ confidence in the specialist mortgage lending market is on the up, according to new research from Masthaven Bank.
The lender’s latest Broker Beat report showed nearly three quarters of intermediaries working in the specialist sector felt confident about the future of the specialist lending market — a 12 per cent increase compared to last year’s findings.
On top of this, 89 per cent felt confident about their own company’s prospects — up from 84 per cent last year — in a sign specialist brokers were feeling optimistic about the second half of 2019.
Of the 120 intermediaries polled in April, more than a quarter (27 per cent) expected their topline revenue to increase by about 15 per cent. Some 35 per cent of this group thought the majority of this additional work would come from direct marketing and business activity.
According to Masthaven, this showed the specialist market felt positive about their business prospects despite a subdued housing market.
The findings show this stems from the fact they serve a wide range of potential customers.
When asked what type of customers brokers expected to see more business from in the next 12 months, nearly half (47 per cent) of those polled cited specialist finance.
Some 19 per cent expected to see more business from later life borrowers, followed by first-time buyers at 14 per cent.
Price, criteria and speed of application topped the charts on what brokers thought mattered most to customers.
More than four in 10 (41 per cent) said low rates were important while 30 per cent said flexible criteria and 12 per cent wanted a fast application process.
Customer service didn’t feature as a top statistic this year compared to the one in five of intermediaries that cited it as a differentiator last year.
Lending criteria and the impact of regulation are both cited by intermediaries as being growth challenges in the market at 28 per cent and 14 per cent retrospectively.
Nearly a quarter (23 per cent) of brokers thought the remortgaging market is expected to experience the most growth, followed by later lending at 20 per cent.
Jon Hall, managing director at Masthaven, said: “Despite the ongoing uncertainty facing the UK economy, nothing, it seems, can compete with the resilience or dampen the confidence of specialist mortgage brokers.
“Instead, Masthaven’s second Broker Beat survey shows brokers’ confidence about the prospects for their own businesses and for the specialist mortgage market as a whole have actually increased over the past year.”
Mr Hall went on to say that it was pleasing to see brokers being positive about the specialist lending market and welcomed the diverse areas of growth such as remortgage and later life lending.
He added: “The future looks bright – specialist lending intermediaries see no shortage of promising opportunities and as lenders we should support this over the months and years ahead.”
Nick Morrey, product technical manager at John Charcol, said he could understand why brokers had increasing confidence in the future of specialist lending as the mainstream market was driving for productivity.
He said: “The mainstream market needs to process applications as quickly as possible and in order to do that, they need systems based underwriting to do as much of the process as possible. They need a set of ‘rights and wrongs’ underpinning all they do.
“Applicants nowadays have far more complex scenarios and these systems have to give a yes or no quickly and definitively.
“As brokers we are contacted by many people who have tried the high street lenders but told they aren’t acceptable to the stringent criteria and exceptions are not given.”
Mr Morrey added that specialist lenders were often prepared to step back, look at the applicant’s situation in its entirety and then make a decision based on traditional underwriting methods and mandates.
imogen.tew@ft.com
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