Steve Swyny is Commercial Director at F4B Network
In the old days, the word niche was a catch-all way to describe anything beyond the mainstream, whether in terms of products or services.
The transformation of these niche lending areas, many of which now sit alongside mainstream offerings in terms of demand, reputation and perception, has been interesting to follow.
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Our excellent trade press has really been at the heart of this education process, providing a voice for companies operating in and around the most complex specialist sectors and providing the platform to tout a variety of virtues and point out some of the potential pitfalls. for borrowers and intermediaries alike.
An increase in the amount of data available has also helped advisors better understand where the demand for these products lies and how they can meet the evolving needs of their clients.
Take, for example, a recent study by Knowledge Bank. This highlighted that an easing of lending criteria has put brokers in difficulty with a rush of new independent applicants who only have one year of accounts.
According to the data, the increased demand may be due to the recent relaxation of criteria for the self-employed by lenders, with a number of lenders now accepting borrowers who have used the Self-Employed Income Support (SEISS) program.
It also revealed that the searches done by brokers are actually done, and the dominance of searches for “self-employed – one year accounts” is a strong indication of the types of clients brokers work with.
As they delve deeper into the residential market, it is suggested that an increasing number of brokers are working with clients who have a checkered financial history.
“Default” was listed twice in the top five search terms in September, including “Defaults registered in the past three years” and “Defaults registered over three years ago.”
It is suggested that financial hardship has been a trend over the past six months, with at least one term such as “missed payments” or “defaults” appearing as some of the most searched terms in the residential field since March.
It has also been said that borrowers are looking to use second mortgages to help ease financial pressure. “Capital Raising for Debt Consolidation” was one of the most searched terms for brokers looking for second load products.
In the bridging market, ‘second load loans‘ have emerged in top search terms for the first time since February 2021. Those seeking second load bridging loans are seeking financing for a range of activities, including some include: business expansion, real estate investment and renovation of existing properties, potentially seeking to make them more energy efficient.
The areas cited above may still fall into specialized loan categories, although there is a growing argument that they should no longer be viewed as “niches” due to the demand and volume of business written in. these sectors.
Of course, such transactions are often more complex and require an additional level of expertise. Fortunately, a much broader range of competitive and responsible products are emerging for advisors who know where to look, or who have the right support network in place, to help those clients find the right solution for them.