The tighter lending criteria and a reluctance from traditional lenders to approve applications has stimulated new innovation in the specialist lending sector.
Brokers are seeing new players enter the market and a willingness to lend, which is great news for the market - creating a more competitive environment for borrowers.
However, many lenders are focusing on a select portion of the market, which represents a relatively small segment of society, highlighting an opportunity for brokers to expand their portfolio to cater for a wider audience.
In recent years, many credit ratings have been affected due to redundancy. This means previously creditworthy borrowers suddenly found themselves with a tainted credit record, which will remain for the next few years, regardless of whether they get back on their feet financially.
With this backdrop, intermediaries could find themselves placing the same amount of business across a range of lenders.
However, some lenders have recognised the opportunity to innovate and meet the changing demand that will help grow the market and provide a sustainable portfolio of products.
To stay a step ahead brokers need to forge relationships with specialist lenders that will consider risk and provide a suitable lending solution to complement individual borrowers needs.
This will increase the potential client base and product portfolio, giving intermediaries more flexibility to provide tailored recommendations in a restrictive marketplace.
Borrowers need expert advice more than ever and being in a position to provide a solution not only allow brokers to stand out from the competition, but it will also help forge lasting relationships with clients that will, in turn, increase potential revenue.
In a nutshell, brokers need to ensure their product portfolio complements modern borrowers needs, meaning they can seize the opportunity to deliver the right lending product to a range of customers, not just focusing on ‘prime’ borrowers.
