"On the cusp of 2024, we know that there is a sizeable number of would-be lenders who are keenly following these areas, and considering how best to compete with the existing names."
Despite some external doom mongering around transactional volumes, the specialist market has proved to be very resilient in 2023.
Investors are well aware of the returns still on offer from bricks and mortar and, if anything, have a greater appetite for adding to their portfolios given the potential to snap up a property at below market value given the reduced levels of demand among residential buyers. For those who have needed to move swiftly to maximise these opportunities, a bridging loan has proved to be a smart option over the past 12 months.
Valuations and the specialist market
The performance of specialist areas of the mortgage market has not gone unnoticed by ambitious lenders. On the cusp of 2024, we know that there is a sizeable number of would-be lenders who are keenly following these areas, and considering how best to compete with the existing names.
Greater levels of competition will undoubtedly prove to be a good thing for brokers and borrowers alike. It’s not that more players push the price of the loan down, this is often driven by the market but the drive to stand out from the crowd sparks more creativity and innovation in the actual design of the products, I believe it will also help lenders drive to get service as close to perfect as possible and ensure that any niches which perhaps were previously underserved enjoy more bespoke and tailored products.
Getting to the point of launch can be a long process for all new lenders, which is why it makes sense to utilise the expertise and experience of businesses already comfortable in the specialist market.
Here at Pure Panel Management, this is something we have worked on firsthand in the past and will look to continue in the future. Our long history of operating in the specialist lending space means that we can be relied upon to work with new lenders from the onset to help prepare their entry into the market, and this is something which will continue in 2024. By this I mean in areas such as assisting in the writing of guidance notes for valuers, putting together lenders new forms and using tried and trusted systems which have proven to be a success in the specialist sector.
Understanding what lenders and borrowers need
Time has always been of the essence when it comes to the property market, but this is even more pronounced when it comes to specialist lending, especially over the course of 2023.
Having said that, lenders and borrowers need to be able to move at a pace that suits them, which is why we have always focused on offering physical valuations that are swift and accurate.
Specialist lenders to date have been particularly open to working from shorter form valuation reports. These types of reports can be condensed into just a handful of pages, rather than operating from the longer form reports which can be longer and be more difficult to underwrite. Shorter doesn’t mean cutting corners, our vast experience means we know exactly what lenders need, so these shorter form reports contain all of the relevant information and mean that their underwriters are not having to spend lengthy periods analysing an unnecessarily long report in order to pick out what’s useful.
It’s a good example of how working with experts within the specialist sector can help lenders operate more efficiently.
Partnerships can push specialist sector ahead
Generally speaking, the specialist market has experienced a progressive 12 months, and looks set to enjoy an even more productive time ahead. Demand is strong and shows no signs of abating.
Smart partnerships between those of us operating in this space who truly understand the niche sectors and the different needs of stakeholders within these have been key to success in 2023. And these smart partnerships will continue to open the door to even stronger growth in 2024 while also ensuring that borrowers enjoy the best possible experience.
