Specialist lending market buoyant according to our Broker Beat research

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  • 84% of specialist lending intermediaries feel confident about their company’s prospects over the next 12 months, despite economic uncertainty
  • More than 1 in 5 (22%) believe later life lending is the fastest growth area but also requires most innovation to grow
  • 56% think most of their sales growth will come from referrals
  • Over a third (35%) see lending criteria as the biggest barrier to the sector
  • 61% say customers come to them for specialist advice

Read the full report

New research from Masthaven, the specialist bank, has revealed there remains a mostly positive sentiment
across the specialist lending market amongst intermediaries in the sector, despite the backdrop of economic uncertainty currently facing the UK.

The specialist lending bank found that more than 6 in 10 (61%) working in the sector feel confident about the prospects of the mortgage market, with more than 8 in 10 (84%) confident about their company’s prospects over the next twelve months. Intermediaries are optimistic that their investments will yield positive results, with 43% expecting turnover to rise by more than 10%.

The ‘Broker Beat’ survey includes responses from brokers, directors and CEOs and is designed to gauge insight and opinions of intermediaries working in the specialist lending market. When asked which area of the market is experiencing the most growth, nearly a quarter (22%) of respondents believe later-life lending is seeing the most growth, followed by short term finance (18%) and remortgaging (14%). However, 1 in 5 respondents (20%) believe later life lending still needs the most innovation in order to meet growing customer demand, closely followed by property development (19%) and second charge products (15%).
An increase in demand for more niche mortgage products and flexible criteria was echoed throughout the research. 61% of those surveyed confirmed the main reason for customers approaching them for advice was because they have specialist lending needs – often which cannot be met by the traditional high street banks. Customer service is also an important reason borrowers seek specialist advice (17%), as is flexible lending criteria (22%) and low rates (35%).
However, over a third (35%) stated lending criteria was the biggest barrier to achieving this increase in demand for specialist products, followed by regulatory requirements (27%) and lack of product innovation (18%).  The impact of recent regulatory changes such as GDPR looks to have influenced firms’ attitude to technology-related risks such as cyber-attacks and data breaches, with over half of respondents (53%) citing it as a board-level priority.
Whilst technology remains an important investment priority, customers continue to value face to face interaction with professionals. In order to meet this demand, over two thirds (67%) said they would increase investment in their employees as businesses look to retain the best talent, with a further 56% of respondents expecting headcount to increase within their organisation over the coming year. 41% of those surveyed also intend to increase their marketing investment in the coming twelve months to attract new business and talent alike.

Referrals were seen as the top method for additional sales with over half of respondents (56%) predicting the majority of growth over the coming year would be generated in this way. Recognising the value of networks and being part of a strong mortgage ecosystem means nearly half (47%) of respondents said they would love to win even more specialist finance business over the next twelve months, as intermediaries work together to maintain the buoyant market.   

Jon Hall, Managing Director at Masthaven, commented: 
“Our first ever Broker Beat survey has shown that the specialist lending market shows no sign of slowing with customer demand for specialist products higher than ever. Intermediaries in the market are experiencing an influx of clients who need access to more accessible and affordable products and this, coupled with growing headcount and investment in staff, indicates now is an excellent time to be a part of the sector.
“Diversification of products is key to maintaining a growing customer need for flexibility. There is clearly both demand and gaps in the market for later-life lending, innovative solutions and more flexible lending criteria to meet customers’ needs. Masthaven will respond by prioritising this in our plans and focusing on giving great customer service, given the clear message from brokers. Referrals will also play a key part in navigating this expanding market. What this shows is that the human element is still very much alive, well and indeed vital in the mortgage market and will continue to play a key role in making this sector succeed.
“It is fantastic to see sentiment across the market remains high. Whilst we have embraced a number of regulatory changes already this year and as we gear up for what Brexit might mean to the sector, the specialist lending market continues to be as strong as ever.”

About the research
The research was conducted by Masthaven, with 79 individuals working within the specialist lending industry. Respondents were asked questions regarding thoughts on the mortgage market and direction their company will be moving in over the next twelve months. The data was collected between 01.09.18 – 31.09.18.
About Masthaven Bank Ltd
Masthaven launched as a retail bank in 2016. It offers award-winning saving and lending products. Prior to that, Masthaven Finance has provided a flexible and personalised approach to bridging loans and secured lending since 2004. Today, the bank’s knowledgeable and experienced specialists are committed to providing customers with flexible and fixed term savings accounts, bridging loans, development finance, and mortgages. The bank is authorised by the Prudential Regulation Authority, and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Register no. 719354). Masthaven was named ‘Best Bridging Lender’ in the Coreco Awards (2017); ‘Most Innovative Savings Provider’ in the Moneynet Personal Finance Awards (2017 and 2018); and ‘Best Specialist Lender’ in the Moneynet Personal Finance Awards (2018) and Most Innovative Digital Retail Bank UK 2018 by CFI. Masthaven Finance featured in 2015’s The Sunday Times’ Virgin Fast Track 100 (at number 81). Masthaven Bank was ranked 240 in Financial Times’ FT1000 list (2017).
Hayley Schubert, Rostrum
[email protected]
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