The role of a specialist lender is frequently said to help clients who’ve experienced a significant life event that has left a blemish on their finances. Well, there are few bigger life events than a global pandemic and so, in 2021 and beyond, we expect specialist lenders to step up to become the most important tool in a broker’s toolbox. 

There are several reasons for this.

The financial shock of the pandemic has unsurprisingly caused some borrowers to fall behind on these often-smaller payments, such as credit card and telephone bills. While some borrowers’ financial struggles may be short-lived, they may have a lasting impact on their ability to get a mortgage from a high street lender. Even a couple of missed payments on a credit card can be enough of a red flag for some mainstream lenders to turn a borrower away.

To begin with, it is anticipated that despite the difficult economic environment, mortgage activity will continue to be strong, even beyond the end of the Stamp Duty deadline. The Covid pandemic has made people re-evaluate their lives and their homes and so we expect continued activity in the housing market.

IMLA predicts gross mortgage lending will rise to £283 billion this year – 17.3% ahead of last year’s level, with lending for house purchase being the main driver. For homeowners who won’t be moving, many may choose to make home improvements, which could drive demand for remortgages.

If the rest of the year follows early trends, mainstream lenders could also take a more restrictive view on lending to self-employed customers, and service will continue to be a key point of differentiation between lenders.

This combination of factors will drive a growing number of customers to advisers, as their requirements are not served by the high street. It will also lead to the increasing use of specialist lenders, as they demonstrate that they are the most suitable option to meet the diverse and changing needs of clients – either for criteria, service, or both.

In the next coming weeks, we’ll look at how you can best place your business to ensure you can help more clients as we gradually emerge from the pandemic. Follow us on LinkedIn to find out more.

In the meantime, if you have clients whose finances have been impacted by Covid-19 and you want to learn more about their more options, give us a call on 0800 368 1833 and find out how you can prepare your business for a rise in specialist mortgage applications.