For four out of the past five months, it has been the most searched for criteria by brokers, which demonstrates that either for brokers or their clients bridging lenders being regulated really counts.
There are, of course, significant areas of bridging where it is not necessary, or possible, to be regulated. What the search results cannot tell is whether brokers are searching for regulated bridging because their clients genuinely need a regulated loan, or because either they or their clients feel there is a different level of credibility associated with a regulated loan.
Adverse credit has been a feature now for five out of the last six months. It would be interesting to know whether this search tallies with the search for a residential bridging loan, which has only made its way into the top five once. If brokers are seeing people struggling to get the finance they need through a mainstream lender, are they looking at bridging instead? How many of these would go on to get the finance they need in such circumstances is a different subject.
Maximum borrowing also features highly in the tracker in every month so far this year. Conversely, ‘minimum loan amount’ came into the top five for the first time in March and April, suggesting that more people are looking at bridging perhaps for its more traditional use to bridge the gap between one loan or mortgage and another.
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Over the last quarter it was interesting to see that development bridging and maximum loan to GDV dropped out of the top five searches in March and April. Development finance, of one sort or another, had made it into the top five every month since Knowledge Bank started its index 10 months ago. This recent drop off may indicate that demand for people to carry out ground-up developments may be waning.
In the commercial finance space, the picture was less consistent. Maximum LTV took the top spot in February and March, but was demoted to fourth place in April and May when the top spot was taken by minimum loan amount for the first time and then semi-commercial properties, also for the first time.
The search for ‘commercial investment mortgages’ is a constant, but has moved up and down the top five over the last few months. This perhaps indicates that while people are happy to own their business premises, they may be a little more cautious about speculative investments at the moment.
To summarise, there still appears to be strong demand both for bridging and commercial mortgages, but the searches paint a picture of people looking for maximum bridging borrowing, while perhaps also carrying an element of adverse credit.
It will now be interesting so see how this translates to lending over the coming months and how accurately the broker searches reflect the shape of the market to come.