Why bridging’s burgeoning reputation is well deserved.
Despite baseball not being a mainstream sport in the UK, due to the global reach of American culture we all know what the term ‘step up to the plate’ means. It’s a useful phrase and one that I believe sums up perfectly what the bridging sector has done at different times over the past 15 years, most recently since interest rates started to rise at the end of 2021.
During that period, and most noticeably since the disastrous ‘mini Budget’ last September, bridging finance has offered a fast, reliable and competitively priced option to brokers’ clients who otherwise were largely being left to hang out to dry by the rest of the specialist finance market. Bridging lenders have repeatedly demonstrated that they have the appetite to do business when others prove to be less than keen.
This is confirmed by figures from the Association of Short Term Lenders (ASTL) which revealed that the value of bridging loan books at the end of 2022 had increased by almost 29% year-on-year. Q4 2022 saw £8.6bn worth of applications recorded during the quarter, an increase of 9.1% compared to the quarter ending September 2022. Bridging loan books also grew again in the final quarter of the year, rising by 6.4% on Q3 and reaching a new high of just over £6.5bn.
While the trade association’s figures for Q1 2023 have yet to be released, I’m confident that they will show that bridging continues to play a significant role in financing property investors and developers’ projects as we head towards the second half of the year.
Bridging is being used for myriad reasons; helping deal with chain breaks, offering rapid finance for auctions, providing funding for refurbs, helping with EPC upgrade costs or providing an option for developers to finish a problematic build by using a development exit loan, to name but a few.
While the future for the economy is looking brighter than it did 12 months ago, I don’t believe that it means bridging will return to being an extremely niche product.
At London Credit, we’ve dealt with brokers (and by extension, clients) who had previously never been involved in bridging finance before doing so for the first time during the past 18 months. I believe all newcomers to bridging will have been pleasantly surprised by the experience and will have noted how it helped their clients achieve their desired outcomes.
Our sector rightly has a positive reputation, and it is underpinned by a professionalism which is found throughout all ASTL lenders.
Our team at London Credit is always striving to improve its knowledge and skill base in an effort to ensure top quality service is provided to our brokers and our clients. We anticipate that with the growth of the Specialist and Bridging Lending sector our team members will soon have the opportunity to be accredited and certified in terms on all things related to short term lending.
The growth of the sector means that no longer will bridging lack a professional qualification.
In my book, bridging finance has more than proved its worth over recent years and a clear majority brokers of that became involved in bridging for the first time during this period have reported a positive experience.
The sector has withstood numerous "outside” turbulences but is still going strong is only getting stronger and more professional.
London Credit has always been driven by the highest standards and levels of excellence and our interactions with brokers provide them with the necessary comfort that they and their clients are in good hands.
Hopefully, the sectors’ growth will convince those brokers who are yet to place a bridging case that it can provide a real solution to their clients’ needs.
Constantinos Savvides is Head of Underwriting at London Credit
