The demand for specialist mortgages is anticipated to grow significantly over the following five years, driven by shifts in the residential mortgage market.
- Research from Together indicates that shared ownership is forecasted to increase from £2.3 billion to £5.2 billion.
- Lending to retired customers is expected to rise from £600 million to £1.4 billion, reflecting demographic changes.
- Interest in self-build property mortgages is projected to grow from £57 million to £116 million.
- Many non-standard applicants find access to mortgages challenging, with a notable percentage facing rejections and a lack of adequate advice.
The residential mortgage market is on the verge of transformation, particularly within the realm of specialist mortgages. Research indicates a considerable boost in the demand anticipated over the next few years. This surge is driven by several factors, with shared ownership, lending to retired customers, and self-build property mortgages leading the way. Significantly, shared ownership is expected to rise dramatically from £2.3 billion to £5.2 billion, showcasing the market’s shift towards more accessible homeownership avenues.
In tandem, lending to retirees is set to more than double, from £600 million to £1.4 billion. This increase aligns with the changing demographic landscape and the need for financial products catering to an aging population. It illustrates a societal need to support retired individuals in maintaining housing stability.
Furthermore, self-build property mortgages are projected to grow from £57 million to £116 million, reflecting a growing trend towards personalised home construction. This shift indicates an individual’s desire for customised living spaces, facilitated by flexible financing options.
Despite the positive outlook, non-standard applicants continue to face significant hurdles in accessing mortgages. Statistics reveal that 7% have encountered rejections, while 9% cited the lack of appropriate advice as a significant barrier. This situation highlights the need for lenders who can cater specifically to the nuanced requirements of these applicants.
Ryan Etchells, the chief commercial officer at Together, emphasises the challenges in the current market, pointing out the increasing portion of non-standard mortgage applicants. Mainstream lenders’ failure to adapt swiftly to these demands underscores the critical role specialist lenders play in the evolving landscape. Etchells further suggests that the industry, with governmental backing, must reassess its strategies to support prospective homeowners effectively, suggesting a pivot in focus to more relationship-driven lending approaches.
Rob Thomas, an economist with the Intermediary Mortgage Lenders Association, underscores the societal shifts impacting housing. He notes the considerable number of households unable to transition into homeownership post-global financial crisis, due in part to specific personal characteristics. Thomas advocates for enhanced awareness of the potential solutions specialist lending could offer, potentially bridging the gap towards homeownership for many.
The profound benefits of homeownership are well-documented, necessitating awareness and accessibility to specialist mortgage solutions for broader homeownership realisation. The narrative firmly places specialist lenders at the forefront of meeting these essential housing needs.
The forecasted growth in specialist mortgages signifies an urgent need for adaptable, inclusive lending practices.
