Clydesdale Bank has recently entered into the specialist lending market. It will be interesting to see how they perform. High Street lenders continue to be cautious with mainstream lending, whereas bridging lenders strive to make common sense decisions. Bridging is not just the need for speed but being able to be flexible and find solutions to problems which High Street lenders cannot seem to, or want to do.
The Benefits of Bridging Loans
Recent studies have shown that only 10% of intermediaries regularly use a bridging lender. However, that 10% are discovering that offering bridging loans to their clients provide an easy win for an increase in their income stream. The most important aspect for a bridging lender is establishing how the client will pay back or ‘exit’ the loan when it reaches the end of the term. If the client’s exit is refinance, then our brokers welcome the opportunity to provide this.
The Housing Market
According to Nationwide’s House Price Index, the housing market is slowing down with just 0.4% growth recorded in 2018. However, the bridging market grew by 15% compared to 2017. That’s incredible, and it just goes to show the diversity that bridging provides. In total £767,000,000 was lent in 2018 and proves that bridging is now seen as a mainstream product.
First 4 Bridging Updates
At F4B we continue to provide our brokers with the very best rates and service to match. Our lenders are offering rates that are the lowest they have ever been. The volume of business we provide our lenders is reflected in the service we receive from them; this ultimately means our brokers have a happy client.
We are finding that the valuation expectations set by the client can be unrealistic. In our valuation process, we work with our introducers to ensure the valuation figure remains realistic. For example, our broker has a client looking to purchase a property, the intention being to refurbish and sell on when works have been completed. It is important at this stage for the client to provide a full schedule of the planned works along with the costs. By doing this, it provides the valuer, and ultimately, the lender with the confidence that the client’s project is likely to be successful.