Advisers preparing for rise in specialist lending cases: FRVR

The vast majority of advisers believe that the current economic climate will cause an increase in demand for specialist lending, according to a survey conducted during Financial Reporter’s Specialist Lending Virtual Roadshows.

Related topics:  Specialist Lending
Rozi Jones
29th May 2020
virtual roadshow
"Covid-19 is likely to cause a rise in adverse credit, complex employment types, and other requirements which are best served by specialist lenders."

The Virtual Roadshow, launched as part of Financial Reporter’s new digital events calendar, saw the popular roadshow format reimagined as a virtual meeting room to comply with current social distancing needs - with leading specialist lending providers on hand to educate and inform delegates.

Speakers from Brightstar, Family Building Society, Crystal, Impact, and MFS explored a range of topics, including the rise in expat buy-to-let enquiries, the effect of lockdown on valuations, and the growing need for specialist lending.

During the two Specialist Lending Virtual Roadshows held this week for the North West and London, attendees were asked whether the Covid-19 crisis would spark a rise in specialist lending. 74% of respondents over the two Roadshow dates said they expect a rise in specialist lending cases, rising to 90% for advisers in London.

Compared to a year ago, 62% of attendees said their clients' circumstances are more likely to require specialist, rather than mainstream, lending. A third (36%) expect cases to remain broadly the same.

When asked why they believe their clients were more likely to require specialist lending, the majority of answers surrounded a lack of appetite from high street lenders and a rise in adverse credit over the lockdown period.

More than half of respondents said they expect mainstream lenders to become more cautious as the market reopens, predicting lower LTVs and tighter restrictions over the coming months.

A large number of attendees also highlighted furloughed and reduced income as causing potential credit issues, alongside other financial difficulties such as higher debts and job insecurities.

Advisers expected to see more complex case enquiries due to changing types and sources of income and a growing need for debt consolidation.

More positively, one adviser said that people "will have bigger dreams after surviving Covid-19".

Amy Loddington, communications director at Barcadia Media, said: "Covid-19 has presented challenges for all of us, so it's not surprising that advisers are expecting an imminent rise in clients with specialist lending requirements.

"Covid-19 is likely to cause a rise in adverse credit, complex employment types, and other requirements which are best served by specialist lenders. However the specialist lending market has boomed in recent years and is well-prepared to deal with this type of lending where high street banks may become more cautious.

"The rise in technology has been clear to see during the lockdown period, and our series of Virtual Roadshows have proved a popular tool in enabling advisers to stay connected with specialist lenders and gain clarity and insight into their current lending positions. Specialist lenders will prove invaluable in the weeks and months to come and advisers should see this rise in more complex requirements as a positive challenge."

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