High costs and mainstream lender rejections drive borrowers toward specialist options
Around three in four brokers (72%) believe the specialist mortgage market now presents greater opportunities than ever, with 60% writing more specialist mortgage cases in the past year compared to the previous 12 months, a new white paper from United Trust Bank (UTB) has revealed.
The research, which surveyed over 130 brokers, also found that 81% are seeing more borrowers with financial difficulties, such as defaults and county court judgments (CCJs), and 87% say many of their clients have been rejected by mainstream lenders or other brokers.
The report, titled “Growing Opportunities for Brokers in the Specialist Mortgage Market,” highlights how rising inflation and the cost-of-living crisis have steered more borrowers into the specialist lending sector.
One in five brokers surveyed now focuses solely on specialist clients, with 17% stating that more than half of their cases involve specialist lenders.
UTB’s research underscores the growing importance of the specialist mortgage sector as mainstream lenders increasingly turn away borrowers with complex financial circumstances. Brokers cited helping clients with adverse credit as the biggest area of opportunity, with 81% identifying this as a key growth driver.
The white paper also delves into trends across the residential, buy-to-let, and second-charge loan markets, shedding light on opportunities for brokers and challenges within the sector. Education and collaboration between lenders, brokers, distributors, and packagers are also highlighted as critical for driving growth.
The research combines broker input with interviews from industry leaders, including Stephanie Charman of Sesame Bankhall Group, Liz Simms of Connect Mortgages, William Lloyd-Hayward of Brightstar Financial, and Matthew Arena of Brilliant Solutions. The report also integrates data from the Office for National Statistics (ONS), Registry Trust, UK Finance, and the Insolvency Service.
“For many customers, specialist lending is becoming their only route to homeownership, especially as mainstream lenders increasingly avoid borrowers with complex needs,” said Buster Tolfree (pictured), director of mortgages at United Trust Bank.
He added that collaboration within the industry is key to helping brokers capitalise on the opportunities in this growing market.
“We achieve more when we work together, and at UTB, we are committed to supporting brokers in unlocking the potential of the specialist mortgage sector.”
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