The cases landing on our desks this spring are oddly consistent: credit profiles are largely intact but the way people are borrowing – that is where things are getting interesting.
Bridging & Development
On the bridging and development desks, we have borrowers making fairly sensible decisions. Typically, clean-credit borrowers using short-term lending defensively:
- Debt consolidation and Downsizing
Borrowers are tidying up unsecured debt into one short-term facility, often with a small buffer on top to cover near-term living costs, whilst they look to downsize to more affordable living
The cost of living is hitting hard, but it doesn’t need to result in an adverse credit situation. What is most important is getting a good customer outcome.
How we treat these cases:
We look at the applicant’s overall financial position, and the loan must clearly be in their best interests. The property must be saleable within a 12-month term, and we need to be satisfied with the applicant’s residential plans following the sale – whether that’s downsizing, moving in with family, or renting accommodation.
Where credit is already impaired, we may still consider the loan; however, the only acceptable exit strategy is the sale of the property. The facility cannot be used for credit repair.
Garden Development
Many applicants are making use of large gardens by securing planning permission for a new property on the same title. Often, the idea is to build a home tailored to their own needs, move into the new property, and then either sell the original home or refinance it onto a buy-to-let mortgage.
How we treat these cases:
We offer both regulated bridging and development finance, which gives flexibility when structuring the project and funding the build. Funds can be released in stages, helping to control costs and keep the build progressing smoothly. If the applicant has no previous development experience, we would usually expect to see a fixed-price contract with an established builder.
Specialist mortgages & secured loans
The specialist mortgage and secured loans inbox is seeing one clear theme this month: income.
The patterns coming up most often are contractors stepping out of PAYE or moving between contracts; borrowers in the probation period of a new role, or with additional income from sources that many mainstream lenders will not accept.
How we treat these cases:
For contractors with a proven track record, we can offer greater flexibility. There is no minimum time in current contract providing the applicant can evidence a minimum of 3 months contracting history.
We can also consider PAYE applicants that have moved jobs recently providing they can evidence sustained employment in their previous role and can look to utilise retained profits for applicants with self-employed income.
We can also consider some benefit incomes providing these are paid for the benefit of the applicant.
As an example, a broker recently brought us a case for his clients who needed a £134,000 secured loan for debt consolidation, repay a family loan and raise capital for a loft conversion. The challenge was that one borrower is a limited company director and 100% shareholder. The business was profitable, but they were only drawing around 60% as dividends – not enough on paper to qualify on current drawings alone. Because they were the sole shareholder, they could in practice draw more if they wanted to. So, we looked at undistributed net profit rather than just the current drawings. An accountant’s reference confirmed the borrower had full control over the dividend tap; two years of strong retained profits and a current-year projection backed it up. For the family loan portion, trade quotes for the loft works plus historic bank statements lined the purpose up.
That is just one way we can help with your complex income clients, we treat the probation, second jobs, benefit income with the same eye.
If you are not sure whether a case fits, presenting the income picture is always a good place to start as it tells us almost everything we need to know on a first read.
What this says about the 2026 borrower
The borrower coming to specialist lending in 2026 has changed, even if we have said that (many times) before. The credit profile is largely fine, and the affordability is real, but applicants’ income sources have changed. As a lender, we recognise that there needs to be greater flexibility and understanding of how this has changed and offer solutions to meet these customer’s needs.
Get in touch with Masthaven Finance
The cases that look complicated on the surface are often the ones where using the right lender makes all the difference. If you have a specialist case you’d like to discuss – the team is on-hand to support your client.
