In a market landscape that is increasingly defined by turbulent socio-economic conditions, the ability of brokers to cater to emerging needs and circumstances has been pushed to breaking point. Tightened lending criteria introduced in the wake of the 2014 Mortgage Market Review has effectively marginalised the borrowing requirements of many potential borrowers, whilst rendering wholesale notions of a ‘mainstream’ lending profile obsolete.
Yet, customers who fall into these categories now account for a significant share of the lending market, with groups, including buy-to-let investors, as well as people with irregular or diverse incomes, rapidly constituting a new type of mainstream. For example, there are currently 4.8 million self-employed workers in the UK, representing around 15% of the total workforce, according to the Office for National Statistics, yet over 30% of homeowners who are self-employed feel that the high street mortgage process is biased against them – a substantial figure.
The inability or unwillingness to assess risk positively in the face of change has been identified as symptomatic of the mainstream’s refusal to move with the shifting realities of our modern society. It’s unsurprising therefore, that brokers often struggle or are unwilling to engage with niche markets.
Another niche that has become more specialised is BTL. With landlords having been forced to adopt new strategies to overcome the restrictions caused by changes to tax relief and affordability, many advisers have balked at involvement with the kind of portfolio landlord who requires more than just a product remortgage but also a whole new take on the advisability of changing to a corporate structure for example. Yet there is a new breed of lender, like Landbay, offering a service that delivers the kind of results that a modern investor needs, ready, willing and able to help advisers with these kind of queries.
Therefore, a willingness to think outside of the box and develop closer relationships with the specialist market can help brokers to move with the times and generate new streams of revenue. The rising tide in terms of the number of non-conventional prospective customers in the UK provides a unique opportunity for brokers to engage with this sector. Moreover, with the specialist sector experiencing an incredible 19% growth in lending for every year since 2009 and a tripling in total annual values (from £5 billion to £17 billion), isn’t it time for brokers to embrace the future?
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