Beth Fisher

Editor's Letter: How shopping around for bridging finance can put borrowers - and the industry's reputation - at risk



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Apparently, we’re at the peak of summer. Historically, this has been the quiet period for financial services but, with mass confusion over the constantly changing traffic light system, I’m not surprised to see fewer workers jetting off on holiday.

With a general rise in bridging criteria search numbers, I expect the market to hold steady over this period as confident investors make the most of a buoyant property market—despite what may await it in September when we see start to see the impact of the furlough scheme ending.

Brokers that identify back-up plans and contingencies with their clients will be best placed as the rest of the year plays out, especially as the industry feels the backlash from the recent ‘pingdemic’, further exacerbating the existing supply chain problems around building materials and construction staff shortages, causing project overruns. Some Builders Merchants Federation members have even described it as the most challenging period of the entire pandemic.

With the property sector a key focus to help build more homes to meet soaring demand, increase spend in the UK economy, and create jobs, it is no wonder why we’re seeing asset classes like BTR—which benefits from quicker build-out rates—attracting institutional investment.

In the latest copy of the Bridging & Commercial Magazine, we also talk to two self-proclaimed techies who share their frustrations on the luddite nature of development lenders, and how working off spreadsheets could impact their ability to secure funding and grow. Later in the issue, we take a look at why developers are at risk of reducing their profits to rubble if they forge ahead with inexperienced solicitors.

In part two of our ‘Save our Surveyors’ series, we ask lenders to respond to confetti claim allegations and the plight of smaller valuer firms. Do they care enough? You’ll be the judge of that.

Over the past decade, shopping around online for the best prices has become second nature for most, so it’s understandable why borrowers are doing the same thing when it comes to securing finance. Our cover story explores the effects of deals doing the rounds in the specialist lending sector, and how this can ultimately put consumers—and the industry’s reputation—at risk. “The best deal isn’t the best price,” imparts one broker during our group discussion, highlighting the central difference when providing mortgage and specialist finance advice. A suggested solution that I found particularly interesting is to make it mandatory for loans to be introduced, and for lenders to only accept business from experienced brokers in this field. But, like we’re seeing in the real world with vaccine-sceptics and Covid-deniers, we know how challenging it is to get everyone on board with something—even if it is for the greater good.

 

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