The practice of diversifying your investments has long been a mantra of investors, to achieve sustainable growth. Likewise, businesses and entrepreneurs know that a crucial characteristic of marketplace resilience is to expand your industry knowledge.

This is particularly true for businesses in the property market, including those offering mortgage advice. Take brokers for example, who largely operate in the property purchase market, and whose year may be riddled with difficulties.

While transaction levels have been at respectable levels over the last few years, 2023 has been a different story. Increases to interest rates on regular mortgage deals, coupled with the overall economic uncertainty and lingering high rate of inflation means plenty of would-be buyers have put those proposed purchases on hold.

In April, for example, government figures showed that transaction levels were down by 29% from the month prior, and 22% on the same point in 2022. That looks likely to continue throughout this year.

The state of the housing market means that significant numbers of potential buyers are just not confident enough to go through with a deal currently.

That being said, there is still activity in the remortgage market due to the volume of fixed rate deals coming to an end this year. There have also been considerable numbers of borrowers opting to remortgage ahead of their term expiring, in the hope of avoiding any future pain still to come.

However, there hasn’t been enough business to make brokers sleep easy. That’s why we’ve seen an increase in the number of brokers exploring the change in demand from their clients, by entering into the world of commercial property advice.

Chasing yields
A good example of how investor appetite is changing, is seen in the rapid increase in the bridging market. While residential purchases have seen a decline, that hasn’t stopped property investors from seeking new opportunities. In fact, some are taking advantage of the lower competition in the current market, having noticed that prices are cooling off, and more listings are being discounted.

Bridging loans allow these investors to act fast, as these loans can be processed sometimes in as little as two weeks. Additionally, bridges have allowed these investors to raise refurbishment capital to carry out EPC upgrades or medium-level structural changes before considering a remortgage when the rates are right for them.

Recent data from the Association of Short-Term Lenders (ASTL) shows how the sector is thriving, with completions and applications growing by 11.8% and 13.1% respectively in the first quarter this year.

Other specialist areas are also on the up, such as semi-commercial finance and development finance. Investors themselves are diversifying, tapping into the greater yields on offer from semi-commercial assets or looking to build and develop housing units to boost the housing stock.

The role of the broker
However, these property investors need help from quality intermediaries in order to identify the right financing for their projects. These are areas of the market where there isn’t a huge amount of direct lending going on – instead lenders focus their activities through brokers, opening the door for brokers who are looking at diversifying into such areas.

Some advisers may have been put off specialist finance in the past simply because they did not handle many such cases on an annual basis, or they didn’t feel sufficiently comfortable with the processes involved.

We recognised that issue at Provide Finance, and it was a driving force behind our development as a platform. With Provide, brokers are connected with over 200 lenders – and guided through all the key information and questions that are required of them from the outset.

In an industry driven by FinTech solutions, our goal has been to simplify specialist finance – to merge traditional finance with specialist opportunities. Simply put, each enquiry is automatically matched with various lending options, fast-tracking the applications process. This allows brokers more time to focus on generating new business.

Crucially, support is on hand throughout from Provide’s team of experts, so that brokers have a safety net wherever necessary, while real time updates are provided through the platform so that brokers are kept fully abreast of what’s happening.

Securing clients for the long run
Diversifying into new areas is not always easy, but it can ensure a business remains adaptable. Operating in a range of different areas of property finance means clients are more likely to come to you for help with their various financial needs year after year, securing their business for life.

That long term relationship provides brokers with a foundation from which to build, as well as offering valuable income streams even when core areas of the business experience troughs. That’s why we facilitate a transparent eco-system of helpful financing solutions where brokers, lenders and borrowers can work together on deals to ensure they are completed in a timely and professional manner.

Together, we go far!

Miranda Khadr is founder of Provide Finance