Paresh Raja

Strong relationships with brokers is key in ensuring bridging loans are still delivered




The coronavirus pandemic has posed many challenges to the UK's property sector, including the lending market. However, it has not made transactions impossible.

People are still able to buy and sell properties, albeit with a few added complications. Most notable among these complications are ‘wet’ signing documents; completing surveys and valuations; and finding a lender that is able to deliver the capital the buyer needs.

A combination of technology and a respect for social distancing measures ought to ensure any issues around signing paperwork and visiting properties can be navigated successfully. However, this is a moot point if a prospective property buyer is unable to access the funds they require to complete a deal.

In the mortgage market in particular, many lenders withdrew products or stopped accepting new applications for certain categories of loans. The bridging industry, too, has witnessed various short-term loan providers putting a freeze on operations due to difficulties in completing the full due diligence they usually perform before issuing facilities.

When combined with a more general sense of inertia from both buyers and sellers – a natural by-product of the current economic uncertainty – the failure of lenders to keep transactions moving has contributed to a market slowdown.

However, this need not be the case. Demand for property remains high across the UK, and there are still people eager to sell real estate, regardless of the pandemic. As such, it is up to lenders to rise to the challenge and find ways of supporting their clients. 

Market Financial Solutions (MFS) has achieved this; as reported by B&C last week, MFS has so far deployed 22 bridging loans, totalling £18m, since the lockdown period began in late March. 

Key to our ability to deliver these loans quickly was the strength of the relationships we have with intermediaries. And these relationships are built on two things: trust and transparency.

When coronavirus took hold in the UK, we communicated very clearly with investors, clients and brokers. We were transparent, informing them that we were putting new measures in place to ensure we could still operate and service their needs. We outlined these measures in detail, encouraging an open conversation as to how deals could still be done.

With Prime Minister Boris Johnson having announced that the lockdown will only be very slowly relaxed in the months ahead, it is time for businesses to accept that they must adapt and find ways of still delivering their products or services in the midst of the pandemic. 

For MFS, having already made the necessary changes to our processes to satisfy social distancing rules, we remain confident about what the rest of 2020 has to offer. The past six weeks have underlined that brokers are still in need of bridging loans for their clients; it is up to the lenders to ensure they can deliver. Those that do will strengthen their relationships with the broker community, placing them in a stronger position once the pandemic passes. 

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