"There is still a noticeable lack of understanding across certain sections of the intermediary market when it comes to identifying lending scenarios where short-term finance could be the answer."
Education and support are often talked about when it comes to specialist areas of the mortgage market and it remains a simple rule of thumb that a better understanding of individual sectors will result in more opportunities being realised. A fact illustrated by positive trends and heightened activity levels announced by a number of short-term lenders in recent weeks.
Hope Capital recently posted a 61% increase in enquiries for Q3, when compared with the previous quarter. The lender reported that loan values had also risen, with the average value up 28% in Q3 2019 compared with Q2 2019 and 31% higher than the average loan size in January.
Octane Capital just announced reaching £250m of redemptions, after achieving £125m worth of redemptions this year alone. Some 40% of the redemptions since launch have been by way of sale, with 90% of the loans which had a sale as the intended exit managing to achieve it (the rest being redeemed through refinancing). This was said to coincide with a record third quarter for the lender in terms of both loan numbers and value.
This data suggests there many investors are making the most of the current political and economic uncertainty, and according to Jonathan Samuels, CEO at Octane Capital: “Brexit appears to have buoyed investors rather than bulldozed their confidence.”
These all represent highly positive messages to carry into a short-term lending marketplace which continues to service a growing proportion of borrowers whose needs are being ignored by mainstream lenders. Demand is growing but we also have to remind ourselves that there is still a noticeable lack of understanding across certain sections of the intermediary market when it comes to identifying lending scenarios where short-term finance could be the answer.
This is where that all-important additional layer of knowledge comes into play. When all said and done many enquiries which could benefit from short-term finance often fall at the first hurdle. And that’s understanding the client’s exact requirements and identifying how a short-term solution could fit. This isn’t always the brokers fault. Some clients may not fully disclose their situation and appreciate what is required to complete the transaction or how the process works. However, advisers who can ask the right kinds of questions can open up avenues to a raft of alternative solutions which might not have been immediately obvious. Or at the very least have a relationship in place where answers and potential options could be sought for cases which might not fit in with an adviser’s ‘norm’.
Establishing relationships with such specialists will help brokers to demonstrate a more rounded service and we all know that satisfied clients can massively increase reputations, result in more business and greater retention levels in the future. All of which are ‘must haves’ in the modern mortgage market.
