Strong growth and strong demand drive the market

By Adrian Moloney, sales director at InterBay, part of OneSavings Bank

The bridging market has been going from strength to strength. The Association of Short Term Lenders’ (ASTL) latest figures showed that the final quarter of 2017 saw £1bn of completions by bridging lenders – the highest quarterly total on record. In fact, in 2017 the total value of lending in the sector rose by nearly a quarter (24.6%) compared with 2016.

Despite political and economic uncertainty, the ASTL’s figures show bridging lending has grown every year since at least 2012, when total lending stood at less than £1bn. It now stands at over £3.5bn a year.

What these figures show is growing demand for fast, flexible finance – whether for those residential buyers who have had delays in securing a mortgage, or those buying at auction. Short-term development finance is a key area of growth, and with the increasing political determination to close the housebuilding shortfall, it is likely to provide further opportunities for brokers this year.

Bridging has also benefited from the increasing professionalisation and specialisation within the buy-to-let market, which has followed increased regulation and tax reform. Specialist lenders have provided increasing support for professional landlords with more complicated needs, and there is a growing range of products on offer. This means prospective bridging borrowers have become more confident in their ability to refinance once they have taken on a bridging loan to develop or refurbish properties.

At the same time, the provision of finance is better across the bridging sector. Competition among lenders has improved with new entrants, combined with a low interest rate environment bringing down the cost for borrowers.

It is not just competition on price that is driving the bridging market forward but the quality of execution. Borrowers and their brokers are seeking out those lenders that can provide fast and flexible underwriting, a straightforward application process and, importantly, open channels of communication to provide clear and regular updates on the status of an application.

As demand for bridging grows and moves more and more into the mainstream, it brings an opportunity for brokers to build their businesses, working with trusted lender partners to deliver successful outcomes to a broader range of clients. In light of strengthening demand, we have expanded our distribution to allow our entire broker panel, and their clients, to access InterBay’s bridging proposition. We recognise that brokers are our business, and by building stronger working relationships with this community we are determined to match the groundswell of demand for bridging and commercial finance, no matter the complexity.