The specialist lending market addresses economic uncertainty, but opportunities persist for adaptive lenders, Tab's broker sentiment study reveals.
Despite slowing market conditions compared to six months ago, Tab says it remains optimistic about the sector's resilience and potential. 
The most recent survey shows that most respondents perceive the current professional lending market as “weak or stagnant” mainly due to high base rates and stress testing.
These factors limit borrowers' ability to secure funding and make affordability a key concern, but the borrower segment continues to expand and provide a positive aspect to the industry.
According to the tab, the changing demand for borrowers is clear, with interest from international investors and first-time buyers.
Certain real estate types, including multiple occupants, holiday lets and housing investment homes, are in high demand.
However, the growing number of borrowers struggling financially suggests that economic pressures are driving the need for professional solutions.
Loan approvals were inconsistent, with the most common approval rates falling between 26% and 50%, with close proximity in the 51% and 75% range.
While residential bridge loans, buy-on mortgages and commercial mortgages dominate lending activities, auctions and development finance show significant traction, especially in the North and Midlands.
Given the current climate, fixed-rate loans are a favorable choice among borrowers, with many looking for long-term security where competitive interest rates are available. However, some borrowers support short-term revisions due to market volatility.
Affordable stress testing, high base rates, and restrictive LTV ratios are key challenges to limit access to finance, and conservative property valuations make the issue even worse.
Interest rates remain the most important concern among brokers. Some people predict a basal rate drop of 0.25% to 1% soon, while others predict continuous volatility or slight increases due to instability.
Additional risks include HMO saturation, excessively careful assessments, and potential government intervention in the form of tax or regulatory changes.
Some respondents expect the market to stabilize, while others predict higher rates and increasingly strict lending conditions.
The TAB, led by Chief Executive Duncan Krieger (pictured), suggests that the role of technology in professional lending is growing, with brokers looking for enhanced tools to streamline the process.
Key advances in demand include automated credit score terminology, automated valuation models, improved lender platforms, a centralized flashy solicitation system, and enhanced integration of affordable calculators with credit search.
Despite the current headwinds, Tab says there are opportunities in the changing landscape.
The growing interest from international and first-time investors suggests sustained demand for specialized lending solutions.
Furthermore, we believe that technology adoption is a game changer and could enable lenders to improve efficiency and accessibility for borrowers.
Tab spoke to 27 brokers at the end of January.
