Most brokers expect specialist mortgage market growth in two years

New white paper also reveals the specialist niches that offer the most growth potential

Most brokers expect specialist mortgage market growth in two years

Despite an uncertain economic climate fuelled by a growing cost-of-living crisis and consecutive base rate increases, 94% of mortgage intermediaries still expect the specialist mortgage market to grow over the next two years.

Results of an independent survey of over 100 mortgage brokers, commissioned by United Trust Bank (UTB), also showed that more than half, or 57% , of intermediaries predict significant market growth of up to 20%, while a further 17% expect the market to expand even further.  

The survey is part of extensive research for UTB’s new mortgage white paper, which examines the specialist mortgage market as it stands currently, how it has evolved and matured over the last 10 years, and the opportunities it presents brokers now and in the future.

It also revealed the specialist niches brokers believe offer the most growth potential in the near future. These are borrowing into retirement (61%), self-employed applicants (52%), multiple income applicants (49%), second charges (43%), adverse credit applicants (38%).

Read more: Specialist mortgages set to grow in 2022.

It was also found that specialist cases were an excellent source of new business with brokers indicating that 73% of the specialist mortgage applications they deal with come from new clients. Successfully helping a customer with more challenging requirements can also lead to greater loyalty, with 92% of brokers saying that specialist mortgage customers are more likely to approach them again. 

“The specialist mortgage market exists to serve borrowers who find themselves on the wrong side of mainstream lenders’ criteria; a group of people that is only going to grow given the current economic conditions,” Buster Tolfree (pictured), director of mortgages at United Trust Bank, commented.

“I’m not surprised that more than three quarters of brokers who took part in the research for this paper believe it offers a greater opportunity now than ever before,” Tolfree said. “I absolutely agree that it does, and what’s more, I believe that what many might describe as something of a niche market is going to grow significantly. Cost-of-living challenges, and a rising base rate, will push more customers towards solutions from specialist lenders.  

Tolfree added that it is clear from the findings of the report that the specialist mortgage market has evolved materially since coming to prominence around the turn of the millennium.

“It is now a mature and competitive market which offers a greater choice of lenders and solutions than ever before, in a much stronger regulatory framework,” he said. “It presents a huge opportunity for brokers, and if we continue to strive to give customers what they need, and we as lenders continue to give brokers quicker, easier and more efficient ways of dealing with us, we can all take a decent slice of a cake which is only going to get bigger.”