Amid an uncertain economic climate fuelled by a growing cost of living crisis and several Base Rate increases, 94% of mortgage intermediaries expect the specialist mortgage market to grow over the next two years.

57% predict significant growth of up to 20%, whilst a further 17% expect the market to expand even further.

The findings come from an independent survey of over 100 mortgage brokers, commissioned by United Trust Bank (UTB) as part of extensive research for its new mortgage white paper – Growing opportunities for brokers in the specialist mortgage market.

UTB’s white paper examines the market as it stands currently, how it has evolved and matured over the last 10 years and the opportunities it presents brokers now and in the future. The report uses a combination of quantitative data from a wide pool of mortgage brokers, further insight gained from in-depth interviews and commentary from brokers, network, clubs and distributors, including Brightstar’s Rob Jupp, Connect for Intermediaries’ Jane Benjamin, Dale Jannels from Impact, Matthew Arena from Brilliant Solutions and Danny Belton of L&G Mortgage Club.

The report also reveals the specialist niches brokers believe offer the most growth potential in the near future, with borrowing into retirement topping the list. The top five are:

• Borrowing into retirement – 61%
• Self-employed applicants – 52%
• Multiple income applicants – 49%
• Second charges – 43%
• Adverse credit applicants – 38%

The report also found that ‘specialist’ cases were an excellent source of new business with brokers indicating that 73% of the specialist mortgage applications they deal with come from new clients. Furthermore, successfully helping a customer with more challenging requirements can lead to greater loyalty. 92% of brokers said that specialist mortgage customers are more likely to approach them again, having demonstrated the value they added to the process and the outcome. There was also a higher chance of customers referring friends and family.

Buster Tolfree, director of mortgages – United Trust Bank, said: “The specialist mortgage market exists to serve borrowers who find themselves on the wrong side of mainstream lenders’ criteria; a group of people that is only going to grow given the current economic conditions. I’m not surprised that more than three quarters of brokers who took part in the research for this paper believe it offers a greater opportunity now than ever before. I absolutely agree that it does, and what’s more, I believe that what many might describe as something of a niche market is going to grow significantly. Cost of living challenges, and a rising base rate, will push more customers towards solutions from specialist lenders.

“What also comes through loud and clear in the report is that this market has evolved materially since coming to prominence around the turn of the millennium. It is now a mature and competitive market which offers a greater choice of lenders and solutions than ever before, in a much stronger regulatory framework. It presents a huge opportunity for brokers and if we continue to strive to give customers what they need, and we as lenders continue to give brokers quicker, easier and more efficient ways of dealing with us, we can all take a decent slice of a cake which is only going to get bigger.”