The bridging market has had a really positive 2021 so far. Just like the rest of the housing market, the stamp duty holiday has played a part, but it would be wrong to think activity is going to drop off sharply now the first holiday deadline has passed.
Liam Hughes is head of sales at Y3S Bridging & Commercial
The bridging market has had a really positive 2021 so far. Just like the rest of the housing market, the stamp duty holiday has played a part, but it would be wrong to think activity is going to drop off sharply now the first holiday deadline has passed.
A recent study by Shawbrook Bank polled advisers on which areas of the market were most likely to grow in the second half of the year, with bridging taking top spot having won the votes of more than a quarter (26%) of advisers, ahead of semi-commercial and buy-to-let.
There’s evidently a real expectation amongst advisers that the appetite from investors, who like to take advantage of bridging loans in order to secure those additions to their portfolio quickly, is not going to drop any time soon and is in fact likely to grow.
This market growth presents a real opportunity for everyone in the adviser space, from those specialists who focus on short-term finance to those individuals or firms who perhaps handle only a case or two a year.
Cashing in on competition
Lenders are well aware of the levels of demand from advisers and their clients for quality bridging products. And in a bid to stand out from the crowd, they are taking a fresh look at their product propositions, trying to identify ways to make those products even more attractive to would-be borrowers.
In recent weeks we’ve seen not only new entrants to the market, promising to do things slightly differently, but also a host of rate revisions with some lenders even unveiling their lowest ever rates.
It’s pretty clear there is real momentum within the bridging market at the moment, with borrowers the ones to benefit from the ongoing battle between lenders who are cutting rates and attempting to innovate regarding their product design.
Taking a personal approach
One area that has been particularly heartening for me has been the way that lenders are approaching cases which are a little out of the ordinary.
It’s one thing to find finance for a vanilla deal, a simple transaction where the client and the property being borrowed against fall comfortably within the criteria of any lender.
Yet recently we have seen a fair few cases which have been anything but vanilla, and not only have we been able to find lenders willing to consider the cases, but they have completed incredibly quickly too.
There is not only a healthy level of competition across the bridging sector as a whole but also plenty of lenders who are willing to take a more personal approach by going through all of the details of an individual case to assess just how happy they may be to take it on.
Finding the right deal
However, finding the right deal for your clients is not always straightforward when bridging is an area of the market you only deal with on an occasional basis.
If you have maybe one or two bridging clients a quarter, or even each year, then it’s simply not realistic to expect to be on top of the latest price and criteria developments, which can mean you don’t follow up on those client enquiries.
It doesn’t have to be that way though. By partnering with a specialist, who you are confident will treat the client with the same level of professionalism that mainstream mortgage advisers pride themselves on, you can ensure that not only the client receives the best possible advice, but also strengthen the relationship you enjoy with that client, boosting the chances of them remaining on your books for the long term.
