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The specialist lending forecast that might already need revising

Eighteen months ago, Together Money published a five-year outlook for the specialist lending market, built around analysis from Rob Thomas, a former Bank of England economist. It forecast total UK lending rising from £224bn to £315bn by 2029, a 41% gain. Specialist lending, the report predicted, would grow even faster, from £32bn to £54bn, a 70% increase. By the end of the decade, Thomas argued, more than 20% of all regulated mortgage lending would fall within at least one specialist category.

These sorts of forecasts tend to get attention on the day of release and then quietly disappear into the archive. This one is worth revisiting, because the numbers are already moving faster than predicted.

UK gross mortgage lending hit £290.8bn in 2025, a 20.2% increase on the prior year, according to Bank of England and FCA data. That is already within touching distance of the £315bn figure Thomas forecast for 2029. Property transactions are running at roughly 98,000 a month on a seasonally adjusted basis, which annualises to around 1.18 million, not far from the 1.3 million target for the end of the decade. The base rate sits at 3.75%, down from its 5.25% peak but not falling as sharply as Thomas anticipated (“more sharply in 2026” was the phrase). House prices are up 3.8% annually as of April 2026, according to ONS, with the average UK property now at £270,000.

The total lending number overshooting early doesn’t, on its own, tell us much about specialist lending specifically. But the structural forces Thomas identified, the ones driving specialist demand, haven’t weakened. If anything, they’ve intensified.

Self-employment in the UK stands at 4.57 million people, roughly 13.3% of the workforce. That figure hasn’t recovered to its pre-pandemic peak of over five million, but it represents an enormous pool of borrowers whose income documentation doesn’t fit the rigid templates of high-street underwriting. Thomas forecast self-employed lending growing from £20.9bn to £34.8bn by 2029, a 66.5% increase, and the direction of travel remains clear. Lenders are gradually adapting, with more now assessing salary plus net company profit rather than salary plus dividends, but the gap between what borrowers need and what the high street will entertain remains wide.

The retired borrower category, forecast to grow 126% from £615m to £1.39bn, is similarly well-supported. The demographic pressure is real and compounding. Interest-only mortgage maturities in the 65-plus age bracket continue at pace. The pension income gap affects 12.2 million people, according to Scottish Widows. And the Bank of Mum and Dad shows no sign of closing, with roughly one in five equity release customers using funds to gift to family, per Canada Life’s 2025 data. Later life lending is steadily shifting from a specialism to a core need.

Where the forecast looks more fragile is in the detail. Shared ownership was tagged as the fastest-growing segment, up 126% over the period. The reality so far is more modest: shared ownership sales rose just 2% in 2024-25. The model faces scrutiny, including a National Audit Office investigation published in March 2026, and demand is sensitive to both affordability and regional income patterns. A 126% increase over six years from a 2% annual base would require a dramatic acceleration. It is possible, particularly if the government’s housebuilding targets feed through into new shared ownership stock, but it is far from certain.

Right to Buy, forecast to decline 36%, looks like the most reliable call in the report. Reduced discounts and shrinking council stock are structural, not cyclical. That trend is baked in.

Whether Thomas’s specific numbers land matters less than whether the shape of the forecast proves correct. And the shape is this: specialist lending is growing as a proportion of total lending, and that proportion will continue to rise. The drivers, complex incomes, self-employment, an ageing population with housing wealth but constrained income, regulatory nudges towards affordability flexibility, are not temporary. They are structural.

For brokers who have built their practices around straightforward employed borrowers with clean credit and vanilla deposits, the forecast carries an implicit message. The centre of gravity in UK mortgage lending is shifting. It isn’t shifting dramatically or overnight, but it is shifting steadily. The clients walking through the door in 2029 will look different from the ones who walked through in 2023, and the advisers who can serve them will be the ones who invested in understanding specialist products, lender appetites and complex underwriting before they had to.

Together published this research with their own positioning in mind, of course. They are a specialist lender and the forecast supports their strategic narrative. That is worth noting. But the underlying data, drawn from FCA and Bank of England reporting, is sound, and the direction of travel it describes is consistent with what most of us are seeing on the ground. The specific numbers will land where they land. The structural shift they describe is already well under way.

Research notes