The Intermediary – February 2025 - Flipbook - Page 39
SPECIALIST FINANCE
Opinion
Specialist support
is vital in the
property market
C
ovid-19 has affected
many people in many
ways. One of these
effects was already
happening, of course,
in that it turbocharged
non-standard working practices.
Whether it’s self-employment or
the gig economy, far more people
have now taken control of their own
livelihoods, and many more are
permanently based from home.
This is just one of the major
shis that have reshaped borrower
demographics in recent years. With
this changing market in mind, it
is important for companies like
Masthaven and others in this sector
to create financial products that
align with the borrower’s changing
lifestyle – in a way that is simply not
happening with the high street banks.
Rather than making the borrower
conform to the lender, the product
should be centred around the
customer, and this is where the
specialist market excels.
Specialist buy-to-let
First, looking at buy-to-let (BTL),
people’s views on the market are
decidedly mixed. The Labour
Government’s approach means a
dampening as far as it being profitable
to be a landlord.
There is a view that BTL is moving
much more towards the professional
landlord model rather than what
people would refer to as the ‘dinner
party landlord’. That comes with its
own challenges.
For both BTL and the wider property
market as a whole, we also have to
look at the type of tenant and how
that’s changing.
There will, for example, be an
increasingly large number of smaller
households. This is partly because
of family units being separated, as
well as people living longer, staying
single for longer, and other changing
preferences and demographics.
As we get these kinds of changes
to demographics, those specialist
properties – like houses in multiple
occupation (HMOs) – become part
of the longer-term trend, seeing
increased demand.
This all ties in further with the need
for more housing in general. Specialist
lenders will play a key role in boosting
UK housing stock.
Look at it this way: even if the
population stays constant, those
people will need more separate flats
and houses per person than they
would a generation ago. That’s not
even accounting for the projected
growth in the UK population.
Expanding the toolkit
These changes mean that every broker
must have a broader understanding
of the range of lending products
available to them.
Secured loans, for example, are
something which every Financial
Conduct Authority (FCA) regulated
broker should have in their locker,
especially when someone wants to
release equity.
If someone wants to borrow
£50,000, it is oen far cheaper to take
a second charge loan than to have to
refinance out to a new provider.
There are other times when it
is beer for the borrower to take a
further advance on the existing lender
or to refinance out, but a secured loan
should be considered in each and
every case.
The secured loan market reached
£7bn a year of originations in
2007. Now it’s somewhere between
£1.5bn and £1.8bn a year. Different
sources say different figures, but what
ANDREW BLOOM
is CEO at Masthaven Finance
Rather than making
the borrower conform to
the lender, the product
should be centred around
the customer”
everyone agrees on is that over the past
couple of years this market has been
growing strongly.
What I find extremely encouraging
in the secured loan market is that,
even with interest rates increasing so
significantly – which has tempered
down the demand for all lending
products – the market has still grown.
It has grown and it will continue to
grow. Secured loans are an important
division of ours at Masthaven, but
importantly, it is just one of a suite of
lending products which we provide to
our intermediary partners.
A home of your own
Another example of why you would
use the services of a specialist lender is
when somebody wants to build their
own home. Where do these clients go
to get finance?
There are a lot of people in the
UK who want to build new or
substantially develop their existing
house. This also plays into the need
for more housing to be built overall in
the UK.
The clear message is that people
must go to a provider that meets their
needs. That’s led by the intermediary
market, which is exceptionally good
at matching up the customers’ needs
with the right lending provider. ●
February 2025 | The Intermediary
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