The future is specialist – learn how to get involved
Publication date:
17 February 2025
Last updated:
18 February 2025
Author(s):
Paula John
Once upon a time, Mr and Miss Typical met, got married, bought a starter house with a mortgage from the local building society based on Mr’s income from his job-for-life, and had 2.4 children. They moved up the housing ladder two or three times, paid off the mortgage after 25 years, and retired 10 years later on a final salary pension.
The picture today is a lot more complicated – and interesting. People meet their partners later in life, or stay single, or have multiple marriages, or live with groups of friends. We have fewer kids, or none, or have blended families, maybe spread over decades. The average person will change jobs every few years and millions are self-employed. Many transition slowly into retirement, generating a second income to augment less generous pensions – or release equity from their homes in later life to boost retirement income. The complex and colourful profiles of increasing numbers of borrowers cannot be met by the plain old mortgage offerings of the past.
These demographic and social changes explain why the specialist lending sector is booming. Bank of England data shows that total specialist lending more than quadrupled between 2009 and 2021, growing from under £5bn to over £21bn. That trend is likely to continue in coming years as mortgage borrowers’ personal circumstances and needs become ever more varied and, in some cases, complex.
Self-employment grew from 3.3m in 2011 to 4.39m in 2023 representing almost 15% of the workforce, and more people may well head down this route given technological advances, the rise of the gig economy and our increasing focus on work-life balance post-pandemic.
According to a white paper published by Henley Business School, 25% of the UK’s workforce already has a secondary source of income, or ‘side-hustle’, and it believes that number could double by 2030.
Meanwhile the economic squeeze which has characterised the last few years has also pushed more borrowers into the ‘adverse’ category – for instance, the number of consumer County Court Judgements registered in Q3 2024 was 294,046, up 13% on the same quarter a year earlier.
And while we all welcome increased longevity, we are looking for more ways to finance longer retirements on smaller pensions than were needed in the past.
All things considered, it is no surprise that demand keeps growing for complex income homeloans, self-employed mortgages, second charges, adverse credit arrangements, equity release products, bridging, commercial and other specialist lending solutions. All the evidence points to further growth in the specialist market. As an adviser, diversifying into some if not all of these areas simply makes sense.
Of course, getting involved in a new market sector can be daunting at first. That is why the SMP is hosting a series of webinars featuring David Coleman, head of sales at Positive Lending, to explain what specialist lending is all about, and do a deep dive into the different subject areas. There will be seven webinars in all, starting on 28th February. Attendees will learn how to grow and futureproof their business – and earn CPD points for taking part.
https://gateway.on24.com/wcc/eh/2726439/lp/4854156/the-need-for-specialist-lending