Your Business and Industry
How we can help credit worthy borrowers
The latest Money and Credit report showed that individuals borrowed an additional £1.6 billion in consumer credit in January, on net, following £0.8 billion of borrowing in December. This was suggested to be the highest net borrowing by individuals since June 2022 (£1.7 billion).
The bigger picture indicates that, whilst month on month the average effect is a gentle increase of debt, different people are being impacted in different ways. The annual growth rate for all consumer credit increased from 7.2% in December to 7.5% in January. The annual growth rate of credit card borrowing rose from 12.4% to 13.5% in January, the highest level since October 2005 (13.7%), while for other forms of consumer credit the growth rate was broadly unchanged at 5.1%.
These are the types of statistical data which offer a good insight into ongoing consumer behaviour and, alongside a host of other considerations, allows us to build a bigger picture of how we can shape a specialist residential offering to meet the ongoing needs of a range of credit-worthy borrowers.
The individual circumstances of residential borrowers continue to diversify in such a way that bulk underwriting suits fewer of them. Manual underwriting will continue to play a key role within this and is an area in which a growing number of intermediaries and their clients are realising the value.
For example, we don’t always need to look at bank statements. Our underwriters work in partnership with our intermediary partners to careful assess cases on an individual basis.
A process which allows them to navigate some of the more restrictive traditional lending requirements in a more customer-centric manner. All whilst staying within responsible and appropriate lending boundaries. This has also been supported by integrating case ownership into our offering with brokers fully appreciating direct access to a dedicated, decision-making underwriter. And as increasingly complex personal and household financial scenarios emerge, we firmly believe that this type of approach represents the future of the residential mortgage market.
References:
https://www.bankofengland.co.uk/statistics/money-and-credit/2023/january-2023
*This article was originally published by The Intermediary
FOR INTERMEDIARIES ONLY
