Over two thirds of brokers predict they will write more bridging business this year
Over two thirds (69%) of brokers expect to write more bridging business this year than they did in 2018, according to UTB’s most recent Broker Sentiment Poll, and lender flexibility is cited as the main reason their volume of bridging business has increased.
Thinking about the volume of bridging business you write, with which of the following do you agree?
|I expect to write a higher volume of business this year than 2018||69%|
|I expect to write about the same volume as 2018||19%|
|I expect to write a lower volume this year than 2018||12%|
Broker confidence appears to reflect the findings of the ASTL’s recent poll amongst bridging lenders which indicated that 71% expect their business to increase over the next six months.
When asked what was driving increased activity in the bridging sector, brokers indicated that lender flexibility, increased awareness of bridging amongst customers and reduced interest rates had been the main factors. Also included was the reduction in application costs to customers brought about by the increasing use of AVMs in bridging and the introduction of dual legal representation which can save borrowers both time and money.
If you expect to write more bridging business this year, what factors have helped you to do that?
|1st||Flexibility of lenders/products has made bridging suitable in more circumstances|
|2nd||Increased awareness of bridging amongst customers|
|3rd||Reduced interest rates|
|4th||Increased enquiries from professional property developers for acquisition/refurbishment purposes|
|5th||Our increased knowledge/awareness enabled us to consider bridging as a solution in more circumstances|
|6th||Reduced costs such as those brought about by the increased use of AVMs and introduction of dual legal representation.|
|7th||Better BDM/Underwriter support|
Gavin Diamond, Commercial Director – Bridging, United Trust Bank commented:
“There’s no doubt that the bridging market is continuing to grow and our business volumes this year reflect the upbeat assessment of most brokers working in the sector; we’re also on target for a successful year.
“Competitive interest rates and charges and innovations such as increased use of AVMs and dual legal representation for bridging, something UTB were one of the first to introduce earlier this year, have also helped to make bridging even more cost-effective. Whereas a decade ago bridging may have been viewed as an expensive last resort, now it’s often the first choice of funding for many borrowers, particularly for professional investors and developers who value the flexibility of the product and the ability to use lowly geared assets to reduce cash requirements.
“With prominent lenders like UTB continuing to innovate and improve products and services and as awareness and knowledge of the uses of bridging increases amongst brokers and borrowers, the sector has a bright future.”