"A more rounded view on how to best work with brokers, combining great products with exceptional service and support, is helping to pave a brighter future for the industry."
In keeping with a trend of the past five years, the specialist lending sector is continuing on the path of modernisation. It's clichéd to say that challenge brings about change, but it’s certainly true, with the adversity brought about by the pandemic, cost-of-living crisis and political turbulence all forcing lenders to reassess how they operate.
This evolution among lenders has been mirrored by a comparable shift in the needs and expectations of brokers, who are increasingly seeking innovative and diverse product offerings, alongside supportive and responsive business development managers (BDMs) and underwriters. The sector is clearly rising to meet these demands – and it’s important that we maintain this momentum.
Products are no longer the key differentiator
One of the most striking changes in the sector over recent years is that products alone are no longer sufficient to attract business. The Bank of England’s base rate hiking throughout 2022 and 2023 changed the game, taking the specialist lending sector away from its fixation on rock-bottom rates, towards instead a more holistic approach to delivering what brokers need.
As a result, lenders have had to focus more on service quality as their primary differentiator. Indeed, the political and economic turbulence of recent years has created greater demand among brokers for reliability and service quality.
Consider the aftermath of the mini budget in 2022, when countless lenders and mainstream mortgage providers withdrew products on a daily basis and the markets reacted negatively to the fiscal announcement. The knock-on effect of this upheaval resulted in brokers no longer having the time or energy to work with lenders that could not provide the reliability and certainty they need.
Encouragingly, the market responded to this shift throughout 2024. Now, better communication, faster response times, and greater assurances that lenders can move ahead with applications are becoming more commonplace among better lenders, which can only be a good thing for the sector.
Technology is driving progress in the sector
Technology has played a critical role in meeting these changing expectations. The pandemic accelerated the shift to digitalisation, but even as society reopened, brokers continued to seek greater integration of technology in lenders’ offerings.
While few brokers crave a fully digital end-to-end service, there’s strong demand for tools that streamline communication and speed up the application process. For instance, some lenders now use automated systems to deliver rapid decisions in principle, allowing brokers and clients to act quickly. As the market recovers and competition intensifies, such speed will be critical.
However, lenders must balance automation with the human touch. Quick decisions and valuations are vital, but brokers still need access to underwriters and personalised support. This balanced approach ensures that lenders continue to provide the personal service that so many brokers still value so highly.
Moving towards a more diverse and dynamic workforce
All the trends I’ve outlined so far speak to a wider sense that the sector is maturing and modernising. Fortunately, the same can be said for the look and feel of the workforce at large.
Today, teams are increasingly diverse, with greater efforts being made to ensure representation across different genders, ethnicities, backgrounds, and age groups.
This is an extremely positive trend. After all, a diverse workforce results in fresh perspectives, different experiences and innovative ways of thinking, allowing the industry to connect with a much wider range of people.
Importantly, it has broadened the appeal of the sector to younger professionals as well, who can now see that there is a desirable career path for them in the world of specialist finance, no matter what their background is.
A bright future
I’ve spent the last two-and-a-half years developing the ModaMortgages’ proposition from scratch, and building out our team. It’s been a fascinating and hugely rewarding process – the opportunity to take over 20 years’ industry experience and then have a clean slate to build a new buy to let lender has been really exciting, and it’s also brought the trends highlighted above into much clearer focus.
Without question, the sector is progressing. A more rounded view on how to best work with brokers, combining great products with exceptional service and support, is helping to pave a brighter future for the industry. The fact that teams are becoming more diverse and technology is also playing a greater role in delivering products and services is also overwhelmingly positive.
For all the challenges thrown at specialist lenders in recent years, now is an apt moment to celebrate the improvements that are being made. No doubt 2025 will offer up many more examples of this.
