A large majority of brokers think they will increase the amount of bridging finance they do over the next 12 months, according to a broker survey by specialist bridging lender Hope Capital, with 97% of broker saying that they are more than happy to work with unregulated lenders.
Hope Capital’s survey revealed that for more than half of the brokers who answered the survey, bridging already makes up at least 20% of their business, with one in 16 saying more than 80% of their business is bridging. And that level is set to increase, with nine in ten brokers saying they think the level of bridging business they do will rise over the next year.
The survey also revealed that the part of the process that causes the most delays in the completion of a bridging loan is the speed of the client’s solicitor – almost a third cite this as an issue. This was followed by collating information from the client, which is seen as the main cause of delays for 36% of brokers. Getting approval from lenders is an issue for one in five, as is, slightly worryingly, the brokers’ own understanding of the bridging process with 20% saying they have a lack of understanding or knowledge of the bridging process.
In terms of issues that brokers want to see addressed, the survey revealed that 52% think flexibility on LTVs should be a priority, while almost half (48%) say they would like lenders to consider lowering interest rates and improve the speed of service. Four in ten said acceptance criteria needs to be addressed.
Jonathan Sealey, CEO of Hope Capital said “Like any area of lending, there are areas that brokers would like to see improved, and we are keen to address these by always offering the fastest turnaround times and ensuring we are always transparent and flexible. The call for lower rates is likely to be a never ending one however. Rates, including our own, have dropped substantially in the past few months and bridging loans are up to 3% cheaper than they were a few years ago, but while it’s natural that brokers always want them to be lower still, bridging rates will never be the same as mainstream as every loan is underwritten manually.”
“The other area that most brokers brought up as an issue is LTVs and that is something that, as a principal lender, we are able to address. Hope, has its own funds and is therefore able to make a decision about each individual client based on their individual circumstances. For example, we recently had a case with a client we knew well and were prepared to offer an LTV of 87% because we were confident that the property would be worth considerably more once the refurbishment was completed.”
Sealey says that overall the survey paints a very encouraging picture for the bridging industry and for Hope Capital as a lender with 99% of respondents saying either that they will, or are likely to, recommend Hope Capital.
“For the vast majority of brokers, bridging already makes up 20% of their business, and 90% say they are keen to do more over the next 12 months, which shows how much more mainstream bridging has become. Brokers are now turning to bridging lenders for a wide variety of reasons, often because the High Street is not offering the solutions they need or they are hoping for a more tailored service. At Hope, we have seen the level of lending increase significantly over the past year and, like the survey suggests, expect to see it continue to increase into 2018.”