The specialist lending sector’s role is more critical than ever to help these customers and those that are willing to underwrite borrowers’ individual circumstances must be ready to step up, drive innovation and continue to widen the range of customers able to secure a home loan.
Understanding options
So how can brokers and providers engage with these borrowers to ensure they get the support they need? For many first-time buyers with complex circumstances, the first step is simply awareness of their options.
A traditional mortgage is not the only route onto the ladder. Help to Buy, Shared Ownership and the newly announced mortgage guarantee scheme are possible routes for some in Generation Rent who feel locked out of the market.
However, for many of these borrowers it will be awareness of the specialist lending sector that could make the difference. Yet, while this area of the market has been serving “non-vanilla” clients for many decades, its benefits remain unknown to many potential borrowers.
As the UK begins to emerge from what will hopefully be its final period of lockdown, there is a clear opportunity for advisers to raise awareness about the options open to borrowers impacted by the crisis.
Proactively engaging with customers will be critical, particularly as many borrowers simply might not know about specialist lenders, especially if they are new to the housing market.
It’s easy for them to assume that if they’ve been financially impacted by the crisis, they’ll struggle to get a mortgage. Others might already have already tried to find the finance they need but found that their financial situation has barred them from the market.
Rather than risking the impact of hard searches on their credit records by applying to different high street lenders, they may instead choose to put their housing plans on hold.
It’s here that advisers have a central role to play, tackling any misperceptions about how Covid-19 has affected their chances of stepping onto the ladder and to signpost these borrowers to the specialist lending sector.
Working together
Before the pandemic, some advisers also might never have had to help a customer with specialist circumstances before. However, given the impact that Covid-19 has had on the job market and economy, it’s highly likely that this has changed.
For advisers who find themselves in this position, specialist lenders are there to help and they should consider engaging with their BDM teams to understand criteria and which of their clients such lenders can support.
Of course, there will be advisers who still won’t feel confident about supporting clients who fall into this specialist category. Advisers are understandably busy at this time.
