Inflationary pressures are putting a squeeze on the cost-of-living
Interest rates have had a big impact on the complex credit space, but there are still opportunities for consumers, according to Reece Beddall (pictured), sales and marketing director of Bluestone Mortgages.
With further inflationary pressures putting a squeeze on the cost-of-living, Beddall believes a growing number of individuals will find themselves in a more challenging financial situation. As a result, he said many will be turned away by mainstream lenders, and this is where industry signposting and the value of advice will be more important than ever before.
Beddall outlined that what Bluestone Mortgages offers consumers is not the lowest rate, it is its bespoke experience with a solution for all consumers; as such, he said he is not concerned with raising interest rates.
However, looking at raising interest rates more broadly, Beddall said it will cause affordability issues and further the cost-of-living crisis.
Read more: Cost-of-living inflation and mortgages – what is the impact?
“It is important for us to keep borrowers informed and up to date on what is happening within the market, and what their best options are going forward,” Beddall said.
Looking to the direction of the specialist lending market and the challenges and opportunities facing brokers and consumers, Beddall explained that worsening financial credit is a serious concern within the current market.
As a result of the cost-of-living crisis, many people across the UK are struggling to balance their financial position adequately.
Beddall pointed to maximum loan-to-values (LTVs), which he said have been increased to help support those struggling due to the increased uncertainty surrounding the market and the economy in general.
“The main challenge for the industry is finding solutions to help first-time buyers to still afford a mortgage,” Beddall said.
He explained that by assessing whether a customer can afford to pay their rent, which is often equal to, or sometimes even more than, their expected mortgage repayments, then he believes they should pass their affordability tests.
Beddall went on to say that generation rent needs to become generation buy, and he believes it is the industry’s responsibility to help.
The role of specialist lenders is helping those who are traditionally underserved by high street lenders, for example contractors, self-employed, those with complex credit.
However, Beddall believes this needs to be extended to everyone that is in need of assistance.
With the Help to Buy scheme coming to an end in March 2023, Beddall said other schemes will need to replace this.
He pointed to Deposit Unlock and Shared Ownership schemes, as possibilities to fill the void left by the Help to Buy scheme.
Read more: Shared ownership presents a huge opportunity for mortgage lenders
“Shared Ownership will continue to grow in popularity, especially after the conclusion of Help to Buy, and it is an area we are looking to move into increasingly,” Beddall said.
He explained that as of right now, Shared Ownership is not something which is too common among lenders dealing with complex credit, however he expects it to become more common when Help to Buy ends.
“I am expecting to see the launch of more schemes over the next few months as the year begins to draw to a close and the government starts to think more about life after Help to Buy,” Beddall added.
This is where Beddall believes there are opportunities for brokers to get involved in the specialist market, as he explained that familiarising oneself with all schemes available to consumers will put them in good stead to advise effectively.
This is where Beddall said education plays an important role within the market, as improving brokers’ knowledge improves customer outcomes.
“The market is becoming less and less vanilla, and therefore brokers need to be aware of more,” Beddall said.
