The bridging market has been on rather a roller-coaster over the past few years, albeit it hasn’t been alone in this regard.
That said, things seem to have settled.
Perhaps the picture isn’t as rosy as we would like it to be, with rates creeping up, but is it safe to say at least we know where we stand?
A rise in rates was inevitable at some point. However, this doesn’t look as though it’s going to significantly affect business levels. In fact, the recent Bridging Trends data shows business levels are as buoyant as ever.
The sector can use the past few years as a catalyst
The bridging market has worked hard to step out of the shadows of what some people regarded as a murky, unknown, untrusted product of years gone by. It’s come out into the light to join other well-explained, clearly outlined and understood products.
And it’s transacted by equally transparent brokers.
Chance to shine
With Covid throwing up a curve ball unlike anything seen before, and the stamp duty amendments and halts doing the same, bridging finance was given its chance to shine. It’s fair to say it performed well — for a variety of clients in a variety of situations.
Let’s take this opportunity to push the market further into the spotlight
On the investor side, it allowed developers access to quick capital to take advantage of an opportunity.
On the owner-occupied side, it saved family home purchases, keeping chains intact and having a huge impact on the trajectory of people’s lives.
This feels like the fresh start that the majority of the bridging space has been asking for. We have proved our worth and shown that we should be taken as seriously as any other financial product. Now the question is: where do we go from here?
We are hearing less of, ‘My friend told me bridging was far too expensive,’ and more of, ‘My friend recommended you as you managed to help them out in a similar situation.’
Evaluation
With anything in life where you are lucky enough to get a second attempt or a fresh start, it’s never a bad idea to evaluate what has gone well and what you would change.
To this end it’s a good time for the bridging sector to look at how it can use the past few years as a catalyst, to move forward rather than regress.
With Covid throwing up a curve ball, and the stamp duty amendments and halts doing the same, bridging finance was given its chance to shine.
It’s fair to say it performed well
Brokers will have clients who are more engaged than ever and reliant on advice. The ball is in our court as to how well we gather the information on a deal and how appropriately we place the case. I believe the key question to be asking ourselves and our clients is: do you understand?
Do we, as brokers, understand the range of products available from the owner-occupied side of things, including online valuations, legal representation options and in-depth lender criteria, to name a few?
And do our clients know why we are recommending what we are recommending? Do they understand the ins and outs of the process, logistics and cost?
The most informed clients tend to be the happiest when things go well.
We have shown that we should be taken as seriously as any other financial product.
Now the question is: where do we go from here?
Some clients still say they have spoken to another broker who didn’t ask nearly as many questions as we did. This is always a concern, because you can be only as accurate as your information allows you to be.
If you haven’t got the full picture, how can you be confident in a recommendation? Asking clients questions, and explaining why you are asking them, should never cause an issue.
Responsibility
There is certainly a responsibility for brokers and lenders alike to ensure that clients get the best experience; whether that’s down to brokers’ qualifications being mandatory (this conversation has gone quiet recently, but I wouldn’t be surprised if it resurfaced), or the marketing clients are exposed to being as accurate and clear as possible.
So, what now? Doing things right the first time around leads to happy clients.
Happy clients lead to good recommendations of broker and lenders alike. Let’s take this opportunity to push the market further into the spotlight.
The recent Bridging Trends data shows business levels are as buoyant as ever
If you are a client, find yourself a good broker who takes the time to understand the full picture. Yes, it takes a bit longer, but it will pay dividends.
If you are a broker, take the time to understand the full picture. Yes, it takes a bit longer, but it results in a much easier life.
Sam O’Neill is head of bridging at Clifton Private Finance
This article featured in the March 2023 edition of MS.
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