Why the specialist lending sector is a rising market

With inflation remaining in double figures and interest and mortgage rates rising rapidly, Q4 2022 saw many lenders pausing or withdrawing their products in the wake of the mini-budget. As a result, purchasing plans were put on hold by homeowners and investors, ultimately impacting house prices which suffered declines.

However, in spite of the economic challenges that continue to confront the industry, signs are emerging that the property market is beginning to stabilise as prices return to growth and activity levels suggest that the market could be on an upward trend.

As such, with more buyers and borrowers resuming their plans, the specialist finance sector is likely to enjoy a significant rise in demand in the months and years ahead – particularly as the specialist mortgage market alone looks set to reach a value of £16 billion by 2030.

Indeed, as the needs of borrowers evolve and the demand for more flexible financial products grows, homeowners and investors are increasingly looking to alternative sources of finance for their property investments.

In Q1 2023, for example, recent data shows that bridging loan transactions hit record-breaking levels, surging 68% on Q4 last year. Clearly, the demand is there for more flexible financial products than many high street lenders can provide, so the specialist lending market could be on an uptick.

Borrowers need more flexibility and adaptability

It’s no secret, however, that the current economic environment is a difficult one for borrowers to operate in.

For instance, inflation fell last month but still remains in double figures, so the value of borrowers’ money continues to be eroded in the current climate. Similarly, even though the Bank of England has recently indicated that interest rates are nearing their peak, the speed at which the cost of borrowing has increased since December 2021

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