Brokers report rising confidence in the specialist lending market
Intermediaries’ confidence in the specialist lending market has continued to rise, Masthaven Bank’s Broker Beat report has found.
Nearly three quarters (73%) of intermediaries working in the specialist sector feel confident about the prospects for the mortgage market, 12% more from the previous year. Furthermore, 89% were confident about their own company’s prospects over the next 12 months, 5% more from last year.
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.
“We offer the broadest range of property related lending products on the market and intend to add to this further throughout the year so that intermediaries feel even better equipped with an array of solutions that can be tailored to their customers’ needs.”
Matt Andrews, managing director of mortgages at Masthaven, added: “Any good product comes from solving customer needs and at Masthaven we take this to the next level, developing products that can be both personalised and tailored dependent on your customer’s requirements.
“Recognising that people don’t fit into pre-determined silos and taking customer feedback on board is what drives the increasing flexibility of products and criteria, alongside an ongoing commitment to underwriting complex cases that we are seeing across the market.”
Some 27% of specialist brokers expect their topline revenue to increase by 10% to 20% in the next 12 months and over one third (35%) expect the majority of this additional work to come from direct marketing and business activity.
Confidence among brokers appears to stem in part from the fact they can serve a wide range of potential customers.
When asked what customer types brokers expect to see more business from in the next 12 months, nearly half of cited specialist finance (47%), suggesting that ‘specialist’ business is fast becoming the ‘new normal’.
Nearly two in 10 (19%) expect to see more business from later life borrowers, followed by first-time buyers (14%).
In terms of what intermediaries think matters most to customers when taking out a loan, over four in 10 (41%) said low rates, followed by flexible criteria (30%) and speed (12%).
Interestingly, customer service didn’t feature as a top statistic this year compared to the one in five (20%) of intermediaries that cited it as a differentiator last year.
However, this could be because brokers have now come to expect quality service for them and their customers, rather than it becoming a less important deciding factor.
Lending criteria (28%) and the impact of regulation (14%) are both cited by intermediaries as being growth challenges in the market.
Nearly a quarter (23%) of intermediaries said remortgaging is experiencing the most growth, suggesting a growing number of homeowners are seeking to find the best possible deal in a competitive market.
This was closely followed by later life lending (20%) and short-term finance (13%). Nearly two in 10 (19%) believe property development needs the most innovation in order to meet growing customer demand, alongside later life lending (18%) and buy-to-let products (15%).
This fairly even split suggests there is a belief that greater innovation could drive growth in many different parts of the market and lenders will do well to provide intermediaries with the tools, products and services to facilitate this growth.