Mortgage products linked to specific sectors and regions could offer borrowers greater scope in the UK housing market, particularly as lending criteria is now stricter for buy-to-lets.

The “one size fits all” approach in terms of mortgage lending doesn’t work, according to mortgage and protection network JLM Mortgage Services. The company has called for lenders across the UK to think about offering products that vary from region to region and sector to sector in order to address the major differences across the market.

One suggestion put forward by JLM is to increase loan-to-values in the buy-to-let market, or in top priced areas such as London, which would open up more lending options to a greater number of borrowers.

Houses in multiple occupancy (HMOs) could also benefit from more mortgage options, as well as student accommodation. This could be implemented to varying degrees across different regions, particularly in student-heavy cities such as Manchester, Sheffield and Nottingham.

Opportunities for lenders and borrowers

Rory Joseph, director of JLM, said: “Our view is that, in this market, a one size fits all lending approach is not going to work if you are a relatively new lender who is merely replicating the range of tens of lenders that already exist, have a larger lending appetite, and a far wider reach.”

“There are opportunities to drill down and get much more specific in different regions.”

Sebastian Murphy, head of mortgage finance at JLM, added that while it may be difficult for larger, mainstream lenders to create such products, newer and smaller lenders could find opportunities in the market.

“We’ve had conversations with a number of lenders, and there is interest there, plus as time goes by and the industry becomes more adept at using the information provided by ‘Big Data’, we could see further moves in this direction,” he said.

“For example, lenders should be able to analyse all the borrower and regional data involved to get to a point where you could lend simply based on postcode. From our perspective, in many areas of the country, a regimented and fixed product range which is barely distinguishable from your competitors, is less than useless, and we’d therefore like to see something different from those who should be in a position to deliver.”