The Intermediary – February 2025 - Flipbook - Page 8
RESIDENTIAL
Opinion
Diverse needs met
with a specialist
approach
T
he specialist residential
mortgage market is
expanding rapidly as
more borrowers seek
lending solutions
beyond what high
street lenders can offer. Self-employed
individuals, those with multiple
income streams, and borrowers with
complex credit histories oen struggle
to meet traditional mortgage criteria.
Given this growing demand, it’s
unsurprising that the wider specialist
mortgage sector is projected to grow
by 70%, rising from £32bn to £54bn
by 2029.
Meanwhile, data from the Mortgage
Lending and Administration
Return (MLAR) shows that the total
outstanding value of residential
mortgage loans in the UK reached
£1,670.9bn in Q3 2024, a 0.6% increase
from the previous quarter, marking
its highest level since early 2023.
Additionally, the Royal Institution
of Chartered Surveyors (RICS)
reports continued growth in buyer
enquiries and sales activity, reflecting
positive momentum across the
housing market. These figures
highlight sustained demand for
homeownership, reinforcing the
need for diverse mortgage products
that accommodate a broader range of
borrower circumstances.
Within this, incorporating a
holistic approach which considers an
applicant’s full financial picture and
history, rather than relying solely on
credit scores, is essential.
Demand for flexibility
A significant trend shaping this
market is the increasing need for
larger loan sizes. The reason behind
this is to ensure that specialist
residential clients can secure the level
of loans they need, and as property
values have begun to rise – albeit
at relatively low levels – we must
ensure loan size criteria meets the
changing demographics of the UK
property market.
As such, we have recently enhanced
maximum loan sizes across multiple
product tiers and loan-to-value (LTV)
thresholds so that our intermediary
partners and their clients can access
the funding required to buy their first
home, move up the property ladder or
refinance to more favourable terms.
This additional funding, where
Specialist mortgages are no longer just an alternative for those unable to meet high street lending criteria
8
The Intermediary | February 2025
GRANT HENDRY
is director of sales at
Foundation Home Loans
appropriate and with responsible
lending boundaries, is particularly
important given today’s economic
challenges. Rising living costs and
financial uncertainty continue to
impact affordability, leaving many
borrowers outside conventional
lending models and seeking what
may in the past have been deemed
‘alternative’ financing options
Looking ahead
Specialist mortgages are no longer
just an alternative for those unable
to meet high street lending criteria.
Whether supporting first-time
buyers, facilitating home moves, or
suitable refinancing options, they
are becoming a far more mainstream
solution for a growing segment
of borrowers.
For advisers already established
in this sector, the expanding market
presents valuable opportunities
to serve an even wider client base.
Meanwhile, those new to specialist
lending can build expertise by
working closely with a range of
lenders to stay ahead of loan size
adjustments, evolving mortgage
products, and shiing borrower
trends – all key factors in delivering
tailored solutions for complex cases.
As lenders continue to refine
their products and expand criteria,
intermediaries who embrace
innovation and understand individual
lending nuances will be wellpositioned to navigate this evolving
market. Most importantly, they
can help more clients achieve their
homeownership and property goals
with confidence. ●
