Brokers debate whether the term still has value
While the mortgage industry has long been dominated by building societies and banks which provide the majority of loans in the UK, specialist lenders have been a presence in the market since the mid-1980s, enabling greater numbers of customers who might not meet mainstream criteria to gain access to borrowing. Specialist lending’s boom in the 80s, was followed by a bust in the early-1990s, and then a further boom until 2007, before the market nosedived again during the global financial crisis. Having survived a succession of storms, it is thriving once more - and is forecast to grow to £54 billion by 2029.
But does the specialist market retain its special quality? Broker Saam Lowni (pictured left), from Merryoaks Finance, suggests not. “To me, the term specialist lender carries a certain weight, evoking notions of expertise, distinction, and a capability beyond the mainstream,” Lowni said. “How justified is that label in practice in today’s market, where every case we look at is unique in some way and requires a bespoke approach? What qualifies a lender as specialist is a willingness to fund assets outside the remit of high street banks - for instance, HMOs rather than standard residential or buy-to-let properties. This does represent a meaningful point of differentiation. However, for many lenders, that is where the specialism both begins and ends. Despite their broader lending remit, the majority of these so-called specialists assess properties through much the same lens as conventional lenders. Higher-than-average rental income typically does not result in improved rates or enhanced loan-to-value ratios. Some lenders may even disregard the uplifted income altogether, and the only concession they provide is the permission to let the property in a different way.”
He continued: “If one were to describe them more accurately, many might fall under the category of ‘conventional lenders who are prepared to consider marginally more complex assets, but apply traditional criteria and charge a premium for doing so’. Naturally, this version is less helpful for branding purposes, hence the reason most marketing departments peddle the specialist lender title. In reality, there is a spectrum of specialism within the market and recognising where a lender truly sits on that scale is far more valuable than relying on the label alone.”
Is Lowni right? Is the specialist tag being stretched beyond recognition of what we have always understood this section of the market to be? George Sanford (pictured second from left), specialist mortgage adviser at VIBE Finance, believes the term still carries weight, but notes that the market has shifted. “With so many cases now requiring a bespoke approach, the lines between mainstream and specialist have blurred,” Sanford told Mortgage Introducer. “That said, true specialist lenders - and brokers - earn that title by consistently delivering creative, flexible solutions that go beyond the tick-box mentality of high street lenders. For me, specialist lending isn’t just about the complexity of the case, it’s about the expertise, speed, and strategic thinking applied to solving it. The pressure is very much on lenders and brokers to cut through the noise and prove the value they bring. The good ones don’t just place a deal, they structure it, guide it, and often save it. That’s what keeps the label meaningful.”
Read more: Why do property deals take so long to close?
An alternative to mainstream lending
Jessica Reehal (pictured second from right), specialist broker at London Mortgage Solutions, also defends the description. “Specialist lending is very much real, and it’s absolutely the right term,” Reehal said. “For anyone who believes it doesn’t exist or that it’s just a marketing label, I’m afraid that’s simply not true. The reality is, there are countless scenarios where mainstream lenders won’t, or can’t, lend.”
Reehal cites landlords with more than 10 mortgaged properties, who are often automatically excluded from high street criteria. Bridging finance for urgent, short-term funding needs is outside the scope of the mainstream risk appetite, she emphasises, and development finance for ground-up builds or heavy refurbishments would make a mainstream lender ‘very nervous’, in her view. “These are not niche one-offs, they are common, real-world scenarios that require specialist lenders with the expertise, flexibility, and appetite to structure deals that don’t fit into a rigid tick-box approach,” Reehal said. “Calling this specialist lending isn’t just correct, it’s essential. It differentiates a vital segment of the market that serves a genuine need. Without it, many property investors, developers, and complex borrowers would be left without solutions. So yes, specialist lending does exist, and the name is entirely appropriate.”
Richard Campo (pictured right), head of growth at Heron Financial, has always worked with more high net worth clients. “They don’t always tick the boxes with mainstream lenders,” Campo said. “It may be simple things like large or complex bonuses, let alone when you get into the more complex world of self-employed clients who may have majority shareholdings in multiple companies and, God forbid, overseas income. So even on the face of what can be a simple case, it can get more specialist when you look under the bonnet.
“I feel the term specialist is a bit of whitewashing of adverse, as it was probably more commonly known pre-Credit Crunch. I think that is a good thing - language is very important. To say to a client, ‘Oh, this will be adverse’ doesn’t feel right, whereas, ‘This is more of a specialist proposition’, sounds much better. If you are getting a mortgage you are intelligent enough to understand the subtext. I think any good broker needs to be a specialist, in any case. Obviously I respect anyone that works in a specific market but one thing I have always found most interesting about this job is helping clients with different situations. Indeed the words of the great Ray Boulger (senior mortgage technical manager at John Charcol) ring in my ear, from when I spoke to him for advice on placing a case – ‘Go where the research takes you.’ I have always been ambivalent on the lender I use. My job is to get back to the client with the best terms I can find.”
Without specialist lenders, there would be a huge gap of missed borrowers unable to fulfil their potential, suggests Amy Davenport (pictured above, inset), who is responsible for business support and operations at The Mortgage Mum Specialist Finance. “I do believe specialist lending still earns its title,” she said. “The criteria and its flexibility, the underwriting approach, and access to lending such as bridging and development finance go far beyond what the high street can typically accommodate. Specialist brokers need to articulate their value clearly.”
Amar Dhanota (pictured above, inset), from London-FS, is a specialist mortgage adviser to high and complex income earners. “Specialist lending does have its place in the market, for sure, and to some extent does go beyond what mainstream lenders are able to consider, mainly in the buy to let or commercial space,” Dhanota said. “Especially with the clients I personally deal with, most cases would be classified as specialist. It’s more about really understanding your client, their finances, what they want to achieve and presenting them with a solution bespoke to them, which on the surface may look like it is not a mainstream lender case, but if correctly packaged and explained, can be. I look at each case and think would I lend to them and why?”
Sam Hutchins (pictured above, inset), adviser at Blueberry Specialist Lending, believes defining the specialist market can be a case of where you draw the line. “In my personal opinion, specialist lending does stand out from the mainstream and has a distinct difference - the difference being how you structure a case and work around certain issues that a case may present,” he said.
