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By Chris Bramham

The changing landscape

Specialist lending is continuing to grow and has become an unstoppable force in the mortgage broker industry. According to recent statistics, one in ten brokers say they will turn down cases which don’t fit traditional high street lending criteria. So why aren’t brokers turning to experts in specialist lending for advice when their clients’ cases are declined?

I believe brokers often shy away from this area due to a lack of familiarity and a concern that complex cases are particularly time consuming. However, these concerns are largely ill founded as brokers don’t always realise there are other options available to them. Specialists like Brightstar offer them an alternative route, providing them with more options and additional resources due to our extensive knowledge and experience in more complex cases. Consequently, this benefits the broker as they can turn much fewer enquiries away.

Fuelling the fire of specialist lending

The financial crisis was a catalyst for many smaller and more specialist lenders to join the market, and more are continuing to join the industry. These lenders range from true specialists lenders to the smaller regional building societies which are playing a growing role in the specialist sector. This has resulted in a more competitive market with a greater choice of funders and options available across a whole range of scenarios.

Specialist lending is often associated with adverse credit, but while there are lenders who deal with those who have credit problems, this is not the only use of a specialist loan. Other specialisms include unusual properties, individuals who want to borrow into retirement, or those with wide varying buy-to-let requirements.

Building buy-to-let

There are currently around 25 to 30 lenders in the specialist buy-to-let arena specialising in HMOs, student lets, portfolio lending and expat lending and there are even more waiting in the wings to make it to market. This is a growing sector providing fresh and exciting opportunities that would be foolish to overlook.

Mainstream mortgage lenders don’t often focus their efforts on niche markets because there are enough ‘vanilla’ customers that make up their core business. If the broker only deals with mainstream mortgages on a daily basis, it is understandable that they may not know how to handle a specialist mortgage case, particularly if they only see a client with these requirements once a month or less.

Innovation is key

An increasing number of lenders are entering the specialist arena as they cannot compete in mainstream lending so innovation is rife and the specialist lending market will continue to offer new opportunities for your clients.

That is why specialists such as Brightstar exist. We deal with specialist lending on a daily basis which means we work with the majority of specialist lenders to provide a solution for the client that is not available on the high street. Our main goal is to match the needs of the client with the benefits provided by our lender panel. It is a win-win situation as the client gets the mortgage they need and the broker benefits from an additional revenue stream, whilst also retaining the client. Specialist lending is leading the way and it is time brokers fully embraced it.