What more can advisers do to support a variety of borrowing needs?

The UK housing market has always tended to generate plenty of headlines, and this is likely to continue during a period which is posing a greater number of questions for potential and existing homeowners.

I won’t be throwing my hat into the ring to speculate on the direction or extent of house price differentials over the course of 2023. However, it’s evident that a degree of market contraction has been experienced in recent weeks as a result of economic and political volatility, heightened inflationary pressure, rising mortgage rates and a string of interest rate hikes.

These factors continue to place well-documented burdens on a variety of households whether owner occupiers or for those who are renting.

According to the latest figures from RICS, UK residential transactions totalled 108,480 in October, 38% higher than October 2021 and 2% higher than September 2022. On a non-seasonally adjusted basis, transactions were 110,850, 29% higher than October 2021 but 3% lower than September 2022.

Whilst this illustrates how well the property market has flourished year on year, it also indicates that the brakes are now being put on some homeownership aspirations. I suspect lending figures for November, December and January are likely to reflect a cooling of the housing market and the economic squeeze will continue to impact UK households and push a growing number of borrowers beyond mainstream lending boundaries.

So, what more can advisers be doing to support a variety of borrowing needs?

For advisers, there has never been a more opportune time to check in with their clients to generate a better understanding of their current financial circumstances. In addition, they need to fully appreciate how the specialist lending market could support some of many challenges they are currently facing.

For many borrowers, there is still opportunity where they may not realise. Many purchasers and remortgagers who believe they cannot access finance because their situation has multiple layers of complexity continue to be able to access mortgages from specialist lenders such as ourselves; such as the self-employed with one year’s income and also a gifted deposit, or a professional requiring a higher income multiple but also who has had more recent credit events.

In an interview we did with Steph Charman, Strategic Relationships Director at SBG back in September – which is still available to view on our Broker Hub – she highlighted a 25% growth in specialist lending across the SBG business. A figure which demonstrates the growing significance of the specialist markets and the magnitude of the role they will pay for a wide variety of borrowers moving forward.

As an intermediary-only lender, it is of the utmost importance to us that we remain relevant to your clients, which is why we consistently evolve our criteria to meet the growing needs of the market. Most recently, our move to add another credit layer, the new F4 tier, to the residential range, as well as broaden the credit events permitted in the F1 to F3 ranges, is testament to our commitment to continue to serve those borrowers with layered complexities who do not meet mainstream criteria but who are still clearly credit worthy.

As well as this, our reputation with you, the intermediary, is vital to us, and we know yours with the client is too, which is why we continue to prioritise service timings and communication.

This commitment to criteria diversity as well as service is where the more proactive, flexible and intermediary-centric specialist lenders continue to lead the way.

Mark Whitear is?director of commercial development at Foundation Home Loans