In a recently conducted survey, almost two thirds said that they expected new specialist lenders to open for business while another 13% of intermediaries believe High Street lenders will wake up to the potential for growth and offer specialist services.
Nearly two-thirds of those surveyed Around 60% of brokers believe specialists will take a bigger share of the mortgage market over the next two years.
The scale of demand is underlined by brokers’ views – around half believe that 20% or more of their clients would benefit from applying to a specialist lender. In the past year two out of five brokers say 20% or more of their clients have had difficulties proving their income
However high rates in comparison to the ultra-low deals offered by High Street lenders are seen as the most significant barrier to the expansion of the specialist market – 52% of brokers highlighted rates as the major issue ahead of 47% who say regulation will be the main brake on growth in the specialist market.
More than one in three (32%) say clients lack of understanding of the specialist market could also constrain growth – however just 15% of brokers say their own lack of understanding of specialist options will hurt the market.
Steve Griffiths, Head of Sales and Distribution at Kensington says: “Industry figures show that intermediary market share is increasing and we expect the significance of the specialist market to grow. Kensington’s experience over 20 years shows that homebuyers and remortgage clients do not all fit High Street criteria and while they will be entirely creditworthy may have issues with proving income which applies to the self-employed and also those in full-time jobs.
The focus on rates is important but there is also a real need for advice and individual underwriting which is why Kensington will be investing in providing support brokers to help them identify and place specialist cases.”
Around 37% of brokers believe the specialist lending market will be constrained by a lack of capacity to lend. However just one in five (22%) believe reputational issues will hit growth.
