"While the first few weeks indicate the market is more resilient than previously anticipated, I think brokers should prepare for lower enquiry levels this year."
FR: For those who don’t know, can you tell us a little about the Brightstar Group?
The Brightstar Group includes Brightstar Financial, which is the leading specialist distributor in the market, and our consumer-facing debt advisory service, Sirius Property Finance. We also have the brands easysource+ and Private Label within the group.
Brightstar Financial launched in January 2011 from serviced offices based in Brentwood, and, over a period of three years, we grew to a stage where we were able to move to our permanent offices in Billericay. We have continued to grow our team, and our office, since then.
Sirius launched as part of the Brightstar Financial Group in October 2016, providing the group with a direct to consumer offering as a distinctive property debt advisory service for high-net-worth individuals and property investors. The company began trading as a separate legal entity in February 2020, but remained majority owned by Brightstar Financial.
Over the last 12 years, we have exceeded £5 billion of specialist lending and recorded a number of other significant achievements, including winning more than 120 industry awards. Our most notable awards, however, was when we were named the number one Best Small Company to Work For in the UK by The Sunday Times for two consecutive years in 2019 and 2020. We became the first company from any industry to top the list for two years in a row and secured the highest ever score in the history of the competition for people engagement.
FR: So, how has the group performed in the last year?
We recently announced our financial results for 2022, during which we delivered a record turnover of £12.6m. This represented a 21% increase in 2021, which was itself a record year. Across the group, lending totaled £1.52bn last year, which was up from £1.2bn in 2021, and headcount increased by 5.5%.
One thing that was particularly pleasing was that, throughout the year, we delivered this record growth whilst also maintaining excellent standards of service, and in 2022 the Brightstar Group achieved 722 5-star reviews on TrustPilot out of the total 738 reviews that we received. This means that 98% of customers who took the time to provide a review gave us five stars.
FR: What are your plans for the Group in the coming year?
The year ahead looks very exciting for the Brightstar Group. We’re building for the future and, as part of this, we will be revitalising and relaunching the branding for Brightstar Financial and the Brightstar Group. We also continue to invest both in technology and our people and our continued focus will be on delivering the best possible service to our partners and clients.
With expectations that overall lending will fall, we are more cautious about our growth forecasts in 2023, but we remain confident that our stand-out proposition will continue to win market share and we still expect to grow our lending and our turnover despite the challenging outlook for the next 12 months. In 2023, we expect to grow lending to £1.78bn and increase turnover by 6.2% on 2022.
FR: What’s your outlook for the specialist market in 2023?
UK Finance has said it predicts gross mortgage lending to fall by 15% this year, from £322bn in 2022 to just £275bn in 2023 and, while the first few weeks indicate the market is more resilient than previously anticipated, I think brokers should prepare for lower enquiry levels this year.
However, where there is challenge there is opportunity and the opportunity in the specialist mortgage market has never been greater. We have spoken for years about the increasing complexity of borrower circumstances, which require a more individual approach that that taken by the big mainstream lenders. ‘Specialist will be the new normal’ is a phrase that has been used frequently in the trade press. But this is no longer the case. Today, specialist is the new normal.
The events of recent years have accelerated the trend that was already happening. Covid was a once in a lifetime disruptor. For some, it proved a motivation to take the plunge into self-employment. For others, it unfortunately led to financial difficulty and missed payments. The cost-of-living crisis has confounded the squeeze on household finances and will undoubtedly lead to a rise in the number of clients with adverse credit.
Property investors have also been impacted by the economic environment. While Buy to Let rates have started to fall again, stress tests are still more stringent than they were this time last year. As a consequence, investors are needing to adapt, think more creatively and explore new avenues to protect their margins and grow their portfolios. This is another area where specialist lenders can help brokers to help their clients achieve their objectives in the year ahead.
Specialist is the new normal in 2023 and I firmly believe that brokers cannot afford to ignore the opportunity to engage with the specialist mortgage market.
