Following the Spring Budget, many individuals will likely be left in a more precarious financial position, according to Bluestone Mortgages.
Following the Spring Budget in March, many individuals will likely be left in a more precarious financial position than they were before the crisis, according to Steve Seal, managing director at Bluestone Mortgages.
He said: “While all eyes will be on the March Budget to see if further support is announced for those struggling financially, it is likely that many individuals will be left in a more precarious financial position than they were before the crisis, which could hinder their eligibility for mainstream lending later on.”
As of 31 December, 1.45 million people were on furlough in the UK, and almost two million self-employed individuals had claimed a third Self-Employment Income Support Scheme (SEISS) grant.
Seal believes that these figures are a reminder of how crucial government support schemes have been in helping households and businesses throughout the COVID-19 pandemic
However, the end of April will mark a turning point for the millions of individuals who have relied on these schemes over recent months.
Seal said: “Specialist lenders, however, could provide these individuals with a financial lifeline in future.
“At Bluestone, we have begun to see what a post-coronavirus market could look like. Between July and December 2020, our application volumes increased by 50% compared to the same period in 2019.”
Seal also believes that when considering the overall impact of the crisis, application volumes across the wider specialist market could be significantly higher over the coming years as borrowers navigate the fallout of government schemes and approach lenders who are able to support them with affordable financing.
He added: “To this end, the specialist market is set to play an increasingly important role within the wider mortgage industry over 2021 and beyond, supporting a rising number of borrowers who may otherwise be disenfranchised by high-street lenders.”
The changing credit profiles of customers impacted by COVID-19 are sure to accelerate the growth of the specialist market going forwards, detailed Seal.
He went on to say that it is vital both lenders and brokers are geared up for the opportunities that are available to them over the long-term.
Seal said: “Lenders will be key in supporting the adviser community and ensuring they have the right resources and tools to help them in conversations with clients, while brokers will be pivotal in helping both existing and future clients secure the financing they need and deserve over the coming years.
“With both lenders and advisers working together, the outlook for the specialist market will remain strong and we will be in a better position than ever to serve the growing number of underserved borrowers across the UK.”
