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SPECIALIST LENDING: A MAD MARCH AND THE INEVITABLE APRIL HANGOVER

By Chris Bramham

In March this year, the specialist lending market was highly active due to the significant (although not entirely unexpected) surge in house purchase activity, as buy-to- let investors rushed to complete before the government’s changes to stamp duty came into effect. This coincided with Easter, the end of the financial year and half term. As a result, this inevitably created an exceptionally busy time for mortgage intermediaries, packagers and lenders alike.

Although there was a drop in enquiry levels in the early part of April, since the latter end of the month enquiries have started to pick up. Some people in the industry have recently argued that there is a strong chance that the market will be relatively subdued in the run-up to the EU referendum on 23 rd June, with buy-to- let mortgages becoming more difficult to get hold of, resulting in less investors.

However, in my opinion, the industry should not fear the aftermath of ‘mad March’. In fact, we are now seeing a change in criteria from existing lenders, particularly in the specialist lending arena, which allows them to cater for a much wider pool of borrowers who have more unusual and complex financial circumstances and requirements.

In other words, we must look on the brightside. Despite the recent lull in enquiries, the specialist lending sector remains buoyant, with an increasing number of entrants joining the market who have some very promising products, services and criteria, which in turn gives borrowers more choice.

Buy-to- let has accounted for an unusually high share of lending in recent months and, due to changing client requirements and increasing demand for more specialist cases, I don’t see any reason to panic. We are clearly experiencing the calm after the storm and, in light of the rollercoaster we experienced in the first quarter of this year, it will be good to see how the specialist market continues to grow and develop further, alongside improving industry standards and an upward trend in enquiries and sales.