Alex Upton

Growth in number of brokers and clients seeking complex funding solutions




Tax changes. Underwriting changes. Licensing changes. There’s been a lot written about the challenges facing property investors over the past few years, but the end result is that we are seeing landlords hunting out increased yield.

They are diversifying into niche market segments, such as HMOs, holiday lets, Airbnb, semi-commercial and multi-unit blocks. These complex assets provide the increased yields that investors are seeking. However, they require tailored funding solutions and specific expertise from both broker and lender.

In order to meet the diversifying needs of investors, brokers themselves are looking to diversify their skills to ensure they can serve their clients. A knowledgeable and expert broker is worth their weight in gold to both an investor and a lender. A good broker helps their client navigate the complex landscape to ensure they get the best possible outcome.

Also, by diversifying their skills, brokers are safeguarding the sustainability of their business. The vanilla market is already largely occupied by mainstream lenders. What will happen to this end of the market over the next 10 years is anyone’s guess. However, it doesn’t seem beyond the imagination that much of the vanilla business could be served without input from intermediaries. 

Clearly I’m biased, but there is significant value in the specialist market, and it is resilient value with much less potential for direct distribution from lenders. By focusing on the more complex transactions, which require experience and a deep understanding, brokers can ensure their future. 

Last year was a great one in terms of bringing a wide variety of market segments to the fore, but we expect the coming years to be characterised by the falling away of market participants (brokers, lenders, or both?) who fail to innovate their proposition in line with the changing needs of borrowers. 

Read more information about Hampshire Trust Bank’s specialist mortgages division on the HTB website.

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