9
Increased lending volumes
%
Terry Pritchard, director at Charter House Corporate Partners “The real area at the top of the list is education for both broker and borrower alike. The problem we have is that the products are often misunderstood and are not offered in all the right circumstances, which is mainly down to ignorance and lack of attention. There needs to be an industry agreed strategy covering not just bridging, but all specialist finance products. It would be a good idea to have a lender forum to start and pool all the areas causing issue and then design a structured education policy to address this. Many of the other issues could be taken care of by doing this.”
Richard Jones, managing director at Pilot Fish
“We have seen a growth in bridging lenders and new products over the past 12 months, which we expect to continue in the short term. At the same time, advances in social media and direct online marketing mean lenders and borrowers are more likely to meet directly without a broker. Our concern, and one that we believe is shared by many of the lenders, is that borrowers may end up with the wrong product because they have not received advice from quality intermediaries. So, of vital importance in the coming year is that the role of the intermediary is promoted and encouraged by lenders to ensure that borrowers get the advice they need, along with access to all new products that are coming to the market.”
Vic Jannels, chairman at Impact Specialist Finance and CEO at the ASTL “The demand from homeowners and investors who want access to fast, flexible finance is clear, and the lending environment has never been more competitive, but the growth of the market is currently restricted by distribution. So, in 2020, I believe one of the most important issues for the bridging sector will be to engage more proactively with the wider industry to educate and encourage more brokers to identify when a bridging loan can be the most appropriate solution for their clients. As part of this, we will also need to address how networks and clubs handle bridging enquiries to ensure we are able to provide all brokers with a clear route to either place or refer their bridging cases.”
Mike Hird, principal at Step-Up Finance “Transparency: if a lender says yes, it should stay a yes. I’ve had too many cases of an eager yes, only to be altered to a no, or a yes, but [with] insufficient funds. Therefore, we need them to be more transparent and honest, from day one.”
Simon Allen, property finance specialist at Searchlight Finance “In 2019, there were too many posts from brokers saying they had been let down by lenders. Bridging is becoming more mainstream and most of the transactions are not specialist in any way. A lot of lenders in the market are after direct business and the only reason I can see for this is to reduce the amount of commission they pay. Broker business should be better packaged than direct business and it is the broker’s role to be the first stage of the underwriting process. Both should save the lender money in the long term. To get the broker on board, we must be able to compare one lender with another and a standardised approach for terms is required sooner rather than later.”
“For those lenders in the bridging sector going into 2020, there is a real need to redefine processes and service propositions to accommodate the shorter timescales required that have recently been slipping. As we all know, bridging is all about flexibility and speed and the requirement for transparency is greater than ever. To have lender(s) on panel(s) that you know cannot only deliver, but do so while offering a top level of service— they will be the ones that will be remembered by clients and brokers alike.” Kim McGinley, director at VIBE Finance
“Lenders and brokers need to work in harmony for the benefit of the client by providing higher standards of service.While some bridging products are unregulated, they should be treated as a regulated process and, as such, lenders should only deal with regulated brokers who are treating customers fairly. This will help to avoid clients becoming trapped in bad deals from the outset, ie with little chance of the exit occurring and scant concern for the potential consequences to the client.”
Steve Burch, short-term lending and development finance specialist at Brightstar Financial “Short-term lending is a flexible product that is as suited to times of uncertainty as it is to times of stability and so, whatever the outcome of these factors over the next 12 months, I’m sure that the market will continue to be buoyant. If we do have a period of greater stability, however, it is likely to stimulate even more investment into the market with increased competition from new and existing lenders diversifying their offering, and this will be good news for clients and brokers.”
“Last year saw a high number of new entrants enter the bridging market. Some have come in with innovative ideas, products [and] underwriting processes. Others have been ill-prepared for the challenges and intricacies and have left shortly after entering.With a record number of lenders expecting to operate within the bridging market in 2020, the advice and guidance of fully qualified commercial/residential finance brokers will be required more than ever to assist clients with choosing the right bridging products.” Colin Anderson, executive director at LDNfinance
Better quality of service
%
14
Sam Le Pard, asset finance adviser at Arc & Co “I think the bridging industry is largely very sophisticated, but we could always use more products. In 2020, it would be great to see more lenders in the second charge bridging space. It is an area that is increasingly required as sales have continued to stall. I’d also be very interested to spot more lenders with expertise in planning. So many developers are seeing planning gains as an early way to add value to their schemes, and it would be [useful] if more lenders could support these types of projects at higher gearing.”
Kevin Thomson, sales director at Connect for Intermediaries