Bridging In-depth
commercial specialist division at the moment,” explains Montlake. “If anyone wants to go in there you have to take the CeMap commercial exams.” Waters says the client
demographic demanding short-term lending has also changed. “Before the credit crunch bridging was lending of last resort, now it’s the wider market that requires bridging finance. The reality is consumers won’t stand for shady dealing and a lack of transparency in the bridging market. Lenders and brokers have had to meet consumers’ demand.”
BrIDgIng anD BeyOnD
Professional dealings are just one side of the coin. Lenders are also getting more innovative in terms of product. “We are more than just a short- term lender,” says Posniak. “The buy-to-let market is starved of liquidity and we have come up with a product just outside the mainstream that’s just a little bit more expensive. The difference between us and the mainstream buy-to-let lenders is that we’re looking for reasons to lend not reasons to decline a borrower.” As well as a more flexible
approach to underwriting and lending, Posniak says Dragonfly’s approach to short-term is also changing. With so little in the way of finance available from traditional buy-to-let lenders and specialist finance for landlords with mid-sized
portfolios, Dragonfly is looking to plug the gap. “We are prepared to innovate,”
he explains. “We will offer two and three year loans, even though they are marginally more expensive than the equivalent in the mainstream market, this is providing genuine shot in the arm. “We’ll lend for up to 18 months
for refurbishments, we like the Houses in Multiple occupation marketplace and we like landlords with large buy-to-let portfolios.” omni Capital is another short- term lender looking at developing a range of medium and longer term products.
Further innovation in this market looks likely, particularly given the
“Any decent broker will almost treat a bridging deal as though it’s regulated and do the sense-check even before it gets to the lender. As a broker there’s no way you would risk saying to the lender the exit is refinance without having something on file to back that up”
14 BRIDgIng InTRoDuCER July 2011
people moving into the short-term sector.
“The big lenders in this sector are headed up by some entrepreneurial guys and I’ve no doubt they will keep innovating and developing this market,” says Montlake. But Masthaven’s Richard Deacon sums why the future of the bridging sector looks particularly bright. It comes down to brokers.
“There is no doubt that the future of bridging is getting brighter than ever before, and in no small part this is thanks to the tough few years we have experienced,” he says. “The mortgage broker who has seen off the shackles of the crunch has now emerged the other side a much stronger and leaner business that has eyes wide open to all types property finance lending.” With mainstream mortgages still sputtering month in month out, bridging seems a small bright spot in a still bleak market. Competition continues to push market practice further towards professionalism. And while it offers customers the finance they want and need, and brokers the income they rely on for survival, long may it continue. n
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