"Given the frequency with which the market is changing, ensuring the needs of residential clients are met is likely to be demanding."
It has been an extremely challenging few years for the UK mortgage market. A global pandemic, soaring inflation, rising interest rates and ongoing economic uncertainty have all created an unstable environment in which finances are stretched, budgets reassessed and purse strings tightened as consumers, brokers and lenders adapt to the new norm.
However, following the Bank of England’s recent decision to hold the base rate at 5.25% at its last two meetings, there are signs that the mortgage market and wider economy are now beginning to stabilise.
Similarly, recent reports from ONS that inflation fell to 4.6% in the year to October is also good news and signals to a much-needed slowdown in the rate of price growth and the cost of goods in the UK.
Collectively, this has resulted in the subsequent fall in mortgage interest rates, with lots of mainstream lenders announcing residential deals of sub 5%. A similar trend is also being seen in the mainstream buy-to-let market as lenders start to show greater appetite for business in order to meet demand.
While this is good news for borrowers, it does have the potential to create more work for brokers, with many possibly finding themselves needing to revisit their pipeline business and assess whether clients may now be able to secure a better rate on their first charge loan.
Given the frequency with which the market is changing, ensuring the needs of residential clients are met is likely to be demanding. As a result, this may leave many brokers unable to meet the demands of those clients in need of specialist advice in the commercial, buy-to-let or regulated and unregulated bridging loans market.
It is here that the role of the packager and specialist master broker, such as Clever Lending, comes into its own. Brokers that find themselves with clients in need of a specialist lending solution can refer them to packagers such as Clever Lending to do the work on their behalf.
Clever has been dealing with the needs of commercial, bridging and commercial buy-to-let clients for over 25 years and works closely with an exclusive lender panel to provide lending solutions for those clients looking to secure suitable finance in each of these circumstances.
For example, Clever Lending recently helped a broker secure a £180,000 regulated bridging loan for a client looking to buy a residential property in Scotland after spending years travelling the UK in a mobile home.
Taking out a bridging loan enabled the client to complete the purchase quickly and exit the loan six months’ later by drawing down their pension to repay the loan on their 55th birthday.
Referring the case meant the broker was able to focus on the needs of their more mainstream residential clients, safe in the knowledge that the complexities of their specialist lending client was met. The broker was also paid a fee for referring the client, which is an ongoing arrangement should the client use Clever Lending in the future.
In another case, a commercial buy-to-let client was looking to secure refinancing to consolidate its existing portfolio of 21 properties and capital raise for onward investment to purchase and renovate additional properties. Refinancing was secured at 63% loan to value with a loan of £1.9 million provided against a valuation of £3 million.
The complexity of these two cases requires time and expertise, which is where a specialist broker can help. Many brokers already have their hands full with revisiting pipeline business and seeking alternative solutions for clients whilst also navigating market fluctuations.
By referring any bridging, commercial and commercial buy-to-let cases to a specialist broker, brokers can rest assured the needs of their clients will be met while they focus on the borrowing demands of more mainstream clients.
