Quarterly bridging finance review written by John Hardman, Head of Sales at BFS. John has had a successful 30-year career in financial services, working for both high street banks and specialist property lenders.
His passion and attention to detail in the short-term lending sector is a valuable asset to BFS and his meticulous approach ensures his clients and brokers receive service over and above the level they expect. He was nominated for BFM of the year in the Specialist Finance Introducer Awards.
Can you give an overall state of the bridging sector UK wide?
It is estimated that the short-term bridging market is worth an estimated £3 billion annually. This sector has seen sustained growth for a number of years now as it becomes a mainstream source of funding that can be arranged for an ever-growing number of purposes
Can you do the same for the North?
Likewise, the North of England continues to see increases in the numbers people either entering the market or growing existing property portfolios, the availability of large numbers of comparatively low-value properties coupled with higher yields continue to make this a popular hunting ground for investors UK wide
What are the major differentiators for North and South?
The most obvious one is deal size and property values, which have always been a degree higher, certainly in London. The skill in this field is to be able to pick one’s way through a deal and ensure a robust and realistic exit is put in place before funds are advanced. Whilst this is true of any bridge it has become more of a focal point for high value single assets as Mortgage and BTL Criteria has tightened up
What bridging trends are you seeing?
At BFS we are seeing an increase in numbers of repeat clients moving on to their next project and using our funds to help them achieve it. This demonstrates clearly that we have delivered a clear and cost-effective solution combined with speed and accuracy of service first time around. It is also clear that Bridging is becoming much more “mainstream” than a few years ago as the number of uses increases and the costs have decreased in line with this
Are there any growth areas?
Most definitely small development out of the ground. By small I mean projects where funding is, say, £1m or less. These schemes are broadly ignored by large high street banks as they have clearly set their sights on larger more complex schemes at £2m plus. We have seen a great number of deals this year where clients are looking at building anything from a single house up to 10 units. We are often faced with a proposal that has been well thought out by an experienced professional team and we have a voracious appetite for getting these underway and funding through to completion
Are you seeing new customer groups enter the market?
There have been a number of retired and low-income applicants who have approached us this year looking to chain break and downsize their residential homes. They like the fact we can take a commercial view regardless of their current financial status and enable them to maybe downsize into a home they have had their eye on for some time. These homes are often more suitable for their circumstances and often need to be snapped up quickly as they are nearly always in the same area as where they live. In addition, we have also started to see a number of probate enquiries where we can help release funds whilst a deceased’s estate is being administered, this is especially useful for solicitors who are able to seamlessly help their clients without compromising the relationship they have with them