Specialist mortgage lenders in the UK who typically offer products to buy to let landlords and lifetime mortgages, have seen the value of their annual lending rise by 19% per year since 2009, according to a new report.
Specialist lenders have seen the total value of their lending increase to £17 billion per year in 2016, more than a threefold increase from the low base of £5 billion recorded in 2009, the data from the Intermediary Mortgage Lenders Association (IMLA) shows. The report suggests that specialist lenders are now in a position of strength following the market’s turbulent past, and are effectively catering for the growing number of non-standard borrowers in the UK who fall outside mainstream lenders’ criteria.
‘Specialist lenders have enjoyed strong growth since the end of the recession, largely through their focus on classically niche, less well-served areas of the market. Mortgages are not one size fits all products and as such the number of borrowers with non-standard needs is increasing,’ said Peter Williams, IMLA executive director.
‘Through innovation and flexibility, combined with strong underwriting standards, specialist lenders have capitalised on the growing demand for products like specialist residential and lifetime mortgages,’ he explained.
He also pointed out that the growth of these lenders has been good for consumers too. ‘It is important that mortgage finance is available to a broad range of borrowers, and by serving non-standard areas of the market, specialist lenders are supporting inclusiveness while holding true to today’s strict affordability criteria,’ said Williams.
‘There is strong evidence to suggest that specialist lenders can now break the cycle that has defined the segment in the past. The range of borrowers who qualify for a mortgage on standard mainstream terms will remain restricted, and the mortgage market is also becoming increasingly intermediated,’ he added.
