We see many numbers bandied around in the financial industry, which can sometimes have a numbing effect.
So why should we all, especially brokers, care that bridging exceeded £10bn last year? Because smashing £10bn signals a shift in property finance – a sign of things to come.
So, as the events season gets underway, brokers might want to rethink sprinting past the bridging providers’ stands (we all know the bridging dodgers) or consider expanding their bridging offerings.
As bridging loans become a mainstream financial tool for clients, it might be worth venturing over to a provider to build new relationships.
Dust off the black book to determine what clients might benefit from: service, flexibility, rates, and criteria – plus the all-important proc fee offerings.
MORE TO OFFER
Bridging providers are set to offer more than a branded pen at this year’s events. Expect some serious A-game tactics to win over brokers, as the competition is fierce.
So what has led to the bridging boom?
A more competitive property market, property investors driving demand, chain challenges and an evolution in lenders all contributed to bridging exceeding £10bn in 2024.
If a client faces increased competition to buy a property, the speed achieved with bridging becomes a strategic choice.
Also, the demand for properties to refurb, buy-to-let expansion and auction purchases is rising and this has all compounded the need for fast finance.
Then, add the painfully slow British property buying system, tighter affordability and higher-than-previous rates to the mix and the recipe for £10bn is clear.
Finally, in the last decade the bridging industry has changed beyond recognition to meet the needs of brokers and their clients – a solution waiting to solve all the above.
NEW OPPORTUNITIES
There are tremendous openings for brokers such as more commission opportunities with deals closing faster than traditional mortgages; a chance to provide a service with a complete offering, including fast finance; differentiating against other brokers that don’t offer bridging and being able to offer regulated and unregulated loans for homeowners or professional developers.
However, most borrowers aren’t familiar with bridging yet or still remember bridging from the past, so exploring and explaining options to clients is vital.
KNOW YOUR ONIONS
It’s also essential to get to know different bridging providers, as they all offer different products (beyond the rate): customer service, flexibility, and lending criteria. Get comfortable with where bridging is right or wrong, for instance, fast finance for auction, chain breaks, or property development with an exit strategy within 12 months.
There is a huge opportunity for brokers who use this year to explore bridging lenders’ products and services. Those who build relationships and can flex their muscles to help clients capitalise on property fast will quickly become the go-to for future purchases.
