Specialist mortgage demand is expected to grow significantly over the next five years, as highlighted by Together’s 2024 Residential Mortgage Market report.
- The report forecasts a substantial increase in shared ownership and self-build mortgages, as well as lending to retired customers.
- Challenges persist for non-standard applicants, with many facing rejection and inadequate advice in mortgage applications.
- Industry experts call for more adaptive lending criteria and improved awareness of specialist mortgage solutions.
- The shifting economic landscape and diverse working patterns are driving the growth of the specialist mortgage sector.
The demand for specialist mortgages is set to experience remarkable growth, according to Together’s 2024 Residential Mortgage Market report. The report details how the sector is poised for expansion over the next five years, driven by three major segments: shared ownership, self-build properties, and mortgages for retired customers. This anticipated growth indicates a shifting preference among homeowners towards more tailored financial solutions.
Analyzing the report’s findings, shared ownership is projected to rise significantly, from £2.3 billion to £5.2 billion. Meanwhile, lending to retired customers is expected to increase from £600 million to £1.4 billion. Additionally, the self-build mortgage sector is forecasted to double, growing from £57 million to £116 million. These trends underscore a growing inclination towards customised financing options to meet diverse homeownership needs.
Despite the burgeoning demand, access to specialist mortgages remains difficult for many non-standard applicants. Over the past five years, 7% of such applicants have faced rejection, while 9% cite a lack of adequate advice as a primary barrier. Ryan Etchells, chief commercial officer at Together, has highlighted the need for greater understanding and responsiveness from lenders, suggesting that many mainstream lenders are not adapting quickly enough to evolving borrower circumstances.
Etchells stated, ‘Our research highlights the true challenges faced by homebuyers in the residential property market today.’ He urged the industry, backed by government support, to reassess strategies in aiding homeowners to achieve their property goals. His call to action underscores the necessity of relationship-building and common-sense decision-making in lending practices.
Further insights were provided by Rob Thomas, economist and principal researcher at the Intermediary Mortgage Lenders Association. Thomas pointed out that changes in working patterns and lifestyles have led to a significant number of households unable to pursue homeownership through traditional means. Specialist lending presents a viable solution for these households, potentially offering a pathway to achieve their homeownership aspirations.
The specialist mortgage sector is on the brink of substantial growth, driven by evolving economic and societal trends.
