What has 2022 been like for the bridging market?
by Leanne Ardron, Head of Bridging Finance
It has been an interesting year – to say the least – but throughout it we’ve seen how the best of bridging can contribute in a challenging economic environment.
Technology, reliable lending, expert people and flexible products have been the heroes of the year as brokers have looked for fast solutions to the opportunities – and challenges – in the market.
People-led technology making the difference
It was a record-breaking summer for LendInvest, and that has continued into the winter with another record month in November as the simple applications promised by the bridging portal made brokers flock to our products, and the expert guidance of our BDMs and underwriters were able to see deals cross the line as investors looked to take advantage of the market.
This stayed true as the economic challenges of the past few months reared their head. Despite understandable impacts in the residential and Buy-to-Let markets, our enquiry and signed app numbers remained stronger than ever.
Why was this, as everywhere else people were trying to suss out the market?
Well, for some the slowdown was an opportunity to consolidate. Short-term, fast bridging loans were being used by landlords to upgrade their EPC ratings using our 74% net LTV refurbishment product or our standard unregulated bridge as they looked to consolidate their portfolios ahead of upcoming regulatory changes.
For developers looking for solutions throughout this period brought them to bridging. We saw lots of interest in our development exit product, which allowed developers to roll interest for a longer period while they finalised sales.
When home mortgage interest rates were at their highest, bridging became a short-term, cheaper solution for landlords to acquire funds quickly, review their best exit strategy and refinance without an exit fee.
In the homeowner market as well, changing appetite meant chains were placed more at risk and our regulated bridging product – where we can run AVMs for additional speed – became more in demand as they looked to finalise their home purchases.
Innovating through the next year
While, so far at least, bridging demand has been insulated against other things happening in the market, continuing this trend in 2023 will be a challenge lenders have to meet.
Making a better offer to those who turned to bridging at the end of the year will be imperative.
Our new stepped rate product, for example, is a showcase in how to meet the short-term needs of those looking to consolidate/improve their properties and adding another option to our brokers/borrowers to help their property transaction and business plan.
Improving the technology so brokers can be more certain about their deals will also be important, which is why we’ve updated the portal with live tracking updates from our underwriters so brokers can have full visibility of their deals as they happen.
Faster decision-making in an uncertain climate is another essential component of keeping the market going.
Central to all of this though, is the broker/lender relationship, and connecting the broker with the right expert to build their deal around the borrower needs.
The appetite to lend hasn’t gone away, and the appetite to contribute to the UK housing market hasn’t gone away, the only challenge is how we give everyone confidence to continue doing it with us.
LendInvest plc is a public limited company registered in England and Wales (No. 8146929). Registered Office: 8 Mortimer Street, London, W1T 3JJ.
LendInvest Loans Limited is a company registered in England & Wales with Company No. 09971600.
LendInvest Loans Limited is authorised and regulated by the Financial Conduct Authority (FRN:737073). LendInvest Loans Limited is a wholly owned subsidiary of LendInvest plc.
Borrowing through LendInvest involves entering into a mortgage contract secured against property. Your property may be repossessed if you do not repay your mortgage in full.
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