The current economic environment means that many more of your clients will have specialist circumstances in 2023. A recent study from specialist lender, Pepper Money, found that the number of people with any form of adverse credit on their credit file within the last three years has grown to 7.91 million. That’s more than 15% of the adult population.
This research was conducted last autumn ahead of the increase in the energy price cap, so the likelihood is that, with further pressure on finances over the winter, many more people will slip up on payments, particularly on utilities or communications commitments. Fortunately, the lender market for customers with these circumstances remains very competitive and there continue to be good options to enable and support retail customers to pursue their financial objectives, even if their adverse credit is very recent.
And it’s not just adverse credit that is feeding the growth of the specialist residential sector. Increased living costs are putting downward pressure on affordability, making it harder for your clients to borrow the loan size they want. However, the specialist market offers opportunities for larger income stretches, particularly for those who are self-employed, contractors, or earn multiple or complex incomes.
This is because lenders in this sector take a more hands-on approach to underwriting cases, meaning that they can often better consider different income sources as part of their affordability calculations. This hands-on approach also means that many specialist lenders are able to lend on properties with non-standard construction.
We expect one of the biggest growth areas of 2023 to be debt consolidation, as more borrowers look to streamline their debts and lower their monthly outgoings to help them manage this period of high inflation. Again, this is an area where specialist lenders can help, and many allow capital raising for debt consolidation up to their maximum LTVs. All of these factors mean that, if you don’t engage with the specialist sector in 2023, you risk failing to meet the needs of your clients.
Working with a specialist distribution partner, like Brightstar, can offer the best way of accessing the market and avoiding causing foreseeable harm to your clients with specialist needs. By leveraging our experience and expertise, you can be sure that you are acting in good faith and offering your clients the best possible opportunities to secure a mortgage that fits their circumstances.
SUBJECT TO STATUS. PRODUCTS AND CRITERIA CAN BE WITHDRAWN WITHOUT NOTICE.
FOR INTERMEDIARIES ONLY.
