Brokers and lenders say lending appetite is expanding in specialist areas, but warn current models may not reflect real borrower behaviour
Lending appetite is shifting across the mortgage market, with lenders expanding criteria in some segments while remaining cautious elsewhere – particularly where income structures or landlord portfolios fall outside standard frameworks.
Brokers say opportunities are widening in segments such as higher loan-to-value lending and specialist borrowing, but affordability models do not always reflect how borrowers manage their finances in practice.
To mark International Women’s Day, Mortgage Introducer spoke with women across the intermediary and lending market about where appetite is evolving and where borrower risk may still be misunderstood.
Appetite widening but not evenly
According to Amar Dhanota, director and senior mortgage consultant, improvements in affordability calculations, higher loan-to-value products and greater flexibility for higher-income borrowers have helped open opportunities for some clients, particularly those looking to move up the property ladder.
However, expansion has not been uniform. Buy-to-let stress testing, particularly around two-year products and complex landlord portfolios, still restricts lender choice.
Borrowers with more complex income structures also remain difficult to place in many cases.
“Complex-income professionals, limited company directors and borrowers with multiple income streams can still be difficult to place when lenders only rely on standard forms of income assessment,” Dhanota said.
Some financially strong borrowers may also fall outside traditional frameworks. “Borrowers with strong cash reserves but uneven monthly income patterns, or those who are asset-rich but income-poor, are sometimes treated as higher risk than they really are.”
Lenders say appetite in specialist segments has also broadened.
Charlotte Grimshaw, head of intermediaries at Suffolk Building Society, said lenders are increasingly introducing solutions aimed at borrowers who previously struggled to access mainstream products.
“We’ve seen a seismic shift in the market around affordability for first-time buyers and a greater appetite to lend,” she said.
“The smaller building societies have played a pivotal role in expanding access to higher LTV lending, including 100% LTV mortgages.”
The limits of affordability modelling
Despite wider appetite in some areas, brokers say current affordability models do not always capture how borrowers manage their finances.
“People budget dynamically, not statically,” Dhanota said. “Borrowers cut discretionary spend, adjust savings rates or change behaviour when payments rise.”
Income stability can also be misunderstood.
“A volatile but high-quality professional income can be safer than a ‘stable’ income in a fragile sector – yet models often reward the latter.”
Katrina Horstead, director at Versed, sees a similar challenge in how lenders assess borrower risk. “Some lenders still take a fairly blunt approach to risk by leaning heavily on credit scores and automated rules rather than the underlying story,” she said.
“Many borrowers prioritise mortgage payments above most other outgoings, but that behavioural reality does not always come through in standard affordability assessments.”
Complexity becoming more accepted
Grimshaw believes the market has become more comfortable with complexity. “I’d argue the opposite,” she said. “Mainstream lenders, building societies and complex lenders are all expanding into new specialist markets.”
She added that lenders are also expanding criteria for expat lending, complex income and start-up borrowers.
“Brokers are the eyes and ears of the market. They know what’s coming down the line before lenders do.”
Landlord risks still evolving
In the buy-to-let sector, however, regulatory change continues to influence risk.
According to Jeni Browne, sales director at Mortgage Finance Brokers, some lenders may be underestimating the impact of the Renters Reform Act.
“I do have a concern that lenders are underestimating the impact of the RRA on landlords and the higher risk this presents,” she said.
Changes such as the removal of Section 21 notices and longer court timelines could leave landlords without rental income for extended periods if tenants stop paying.
“With the new rules coming into effect in just a few weeks, a ‘wait and see’ approach may mean the market is missing the opportunity to prepare for these risks.”
Risk judgement shaping lending access
As lenders expand criteria and experiment with new products, interpreting borrower risk accurately remains a central challenge for the market.
From complex income professionals and expat borrowers to landlords facing regulatory change, the examples raised by brokers suggest the industry is still refining how risk is assessed in practice.
While appetite may be widening across several specialist segments, advisers say the real test will be whether lending frameworks evolve quickly enough to reflect how borrowers manage their finances.
For now, the decisions lenders make around affordability, criteria and risk tolerance continue to determine which borrowers the market is prepared to support, and which still require specialist expertise to secure finance.
