New TMA Club data reveals that unconventional borrowing solutions are on the rise

The findings form part of new market analysis released by TMA which revealed that the top three queries their Broker Support Desk assisted Directly Authorised brokers with in Q1 were: Residential Income, Residential Adverse and Residential Self Employed.

During Q1, key broker queries included:

Residential-related adverse credit

TMA Club saw a sustained focus on queries regarding adverse credit, particularly on the residential side, as brokers sought support to advise clients about missed or defaulted payments and County Court Judgements for debt.

With the Pepper Money and Mortgage Business Expo poll showing that 15.1% of all adults have experienced some form of adverse credit in the last three years, it will be increasingly key for brokers to familiarise themselves with options available to borrowers with complex financial circumstances, including second charge mortgages, which could assist borrowers to better manage their monthly finances.

By providing stability and guidance to clients with complex financial circumstances, brokers can develop a strong sense of trust with customers, ultimately boosting client retention and demonstrating value.

Affordability and unconventional borrowers

TMA Club also saw a large number of queries relating to mortgage affordability and income stretches, as ongoing cost-of-living pressures and rising energy costs continue to put pressure on household finances and debt-to-income ratios.

In addition, TMA Club also handled a number of requests around mortgages for the self-employed, reflecting tightening lender criteria for self-employed applicants over the past few years, as the market continues to feel the effects of the pandemic, inflation and economic volatility.

Broker queries revolved around applications with last year’s figures, in addition to using net profits to support affordability challenges. Likewise, the Broker Support Desk saw a slight increase in standard residential queries around maximum age and later-life lending, reflecting the extent to which borrowers are increasingly moving away from the ‘traditional’ mould of younger, 9-5 workers.

Buy to Let

Q1 saw just 32% of queries related to Buy-to-Let, in comparison to 68% focusing on residential borrowing. As the Buy-to-Let market continues to cool off, current and potential landlords face a number of financial challenges in the shape of more stringent affordability stress-testing, and upcoming EPC regulatory changes.

As a result, TMA Club saw an increase in the number of queries around top slicing, as brokers continued to find creative solutions to maximise borrowing, particularly in regions where property prices are inflated or deposits are especially large.

Lisa Martin, (pictured) Development Director at TMA Club, comments:

“With the rise in case complexity due to ongoing inflation and cost-of-living pressures, advisers are playing a more crucial role than ever in supplying customers with the right information and resources to make informed choices for their individual financial circumstances.

"As lenders continue to innovate to ensure there remains a range of products to suit all borrowing needs, including those who are unable to qualify for a high street mortgage, TMA Club’s Broker Support Desk can signpost member brokers to a range of borrowing solutions.

“At TMA Club we are committed to supporting our broker members in the months ahead, and we are continuously partnering with lenders in the mortgage space to ensure our product range remains as wide-reaching and varied as possible.”