“Uncertainty” has become the word of choice for many of us in the property market following the Brexit vote. But uncertainty creates opportunities.
All lenders have had to take a sensible step back, to work out just what they are comfortable with in this new post-Brexit world. We know that some brokers will have had cases where they thought they had found funding for a client, only for the lender to decide that in the current climate they cannot commit to the deal.
This presents an opening for lenders, like LendInvest, who are still keen to lend.
Understandably, brokers will have a select group of lenders that they turn to more often than not when looking to place a bridging loan case. Of course price plays a part - brokers owe it to their clients to secure funding at a competitive interest rate - but there is more to it than that. Intermediaries want reliable and consistent fulfillment, they want lenders that they trust.
Our recent survey of intermediaries made this clear. Every single intermediary named fast turnaround times and quality support from business development managers as the most important factors when determining which lenders to use. Lenders that have demonstrated they can deliver will of course enjoy loyalty from intermediaries.
However, at the moment some - or all - of a broker’s select group of preferred lenders may not be an option. They may have pulled right back from the market, or installed strict criteria which limits what new business they can take on. As such, there is now the chance for brokers and master brokers to forge new relationships with lenders they may have used only sparingly, or not at all, in the past but who are still active and can deliver the funds their clients need.
We saw this begin to happen even before the Brexit vote. Back in June, master broker First 4 Bridging came to us with an urgent case, after the client had been let down by another lender. The £1.6m deal was the first between the two firms, but the fact that we were able to step in to help the borrower avoid punishing exit fees, and complete the loan within just three days, has been an excellent foundation to our new partnership.
That’s not to say that active lenders will be able to pick up all deals which now need a new home. Cases will be considered on their own merits; no lender has unlimited capacity and risk appetite varies across the piece. But along the risk curve the best deals pre-Brexit will likely still be a good deal today if you can fund them.
The fact remains that foundations of the residential property market remain a cause for positivity. No matter our position within Europe, people still need homes in which to live and we still don’t have anywhere near enough of them. Investors and developers need funding, and established lenders with quality, diversified sources of funding are well equipped to do just that.
Matthew Tooth, head of distribution, LendInvest
