Niche to see you, to see you...

Martin Reynolds is director of K&R Consulting

Is the tide turning? Is the market on the rise? In general no but the niche market is definitely getting more interesting. What is a niche market? I do not think that there is a generic definition but in my mind it is an area not adequately covered by the high street. So I would put the following into this category – bridging, equity release and high net worth.

Bridging seems to have grown beyond recognition during the last 18 months. No concrete figures are available but it could be between £300m and £500m. It’s interesting how this market is moving and it will be even more interesting to see where it what develop in the future. Will bridgers move into full residential lending or buy-to-let and will some mainstream lenders move into bridging?

Equity release was worth just over £1bn in its prime but there are signs that 2012 or 2013 will see a return to those figures. We recently saw Stonehaven re-enter the market with some interesting products and they have been warmly welcomed back.

Lyn Perrett, director at The Right Equity Release, said: “As a specialist company we are pleased with the new product offering as it gives clients the options to make monthly payments. It provides flexibility allowing people to have more control over their borrowing into retirement.”

It is also rumoured that other lenders including Retirement Plus are looking to come back in with Hodge Lifetime and New Life Mortgages looking at increasing volumes and entering different sectors of the market. It is interesting that we are not seeing new lenders enter but the experts are coming back.

High net worth lending has never really gone away. The £1m+ market through the high street did disappear but appetite is returning. However through private banks business in this sector has never wavered - it’s just a lot more under the radar and done through specialist brokers.

So we are still struggling with the normal vanilla high street volumes but the niche sectors are beginning to gain traction. Let’s not forget that this is how the market recovered in the mid 1990s from the last recession. What will be the next niche to rise? Will it be first time buyers or the self employed? I feel the next niche could turn out to be really big.

We could even create a new catch phrase for Bruce Forsyth – niche to see you to see you niche!