The vast majority of brokers (94%) are expecting the specialist mortgage market to grow over the next two years, a new study has found.

A white paper commissioned by United Trust Bank revealed that one in six brokers are even expecting market growth of more than 20%.

Amid an uncertain economic climate fuelled by the cost of living crisis and several interest rate rises, UTB’s study found that 94% of mortgage intermediaries expect the specialist mortgage market to grow over the next two years. More than half (57%) predict significant growth of up to 20%, while a further 17% expect the market to expand even further.

The findings come from an independent survey of over 100 mortgage brokers by UTB, as part of extensive research for its new mortgage white paper, Growing opportunities for brokers in the specialist mortgage market.
 
UTB’s report 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.

Furthermore, successfully helping a customer with more challenging requirements can lead to greater loyalty, after 92% of brokers indicated that specialist mortgage customers are more likely to approach them again, having demonstrated the value they added to the process and the outcome. There was also a higher chance of customers referring friends and family.

“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,” said UTB director of mortgages, Buster Tolfree.

“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. 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.

“What also comes through loud and clear in the report is that this 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.

“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.”

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