Comment


Top gun bridger up for grabs as lenders launch


A plethora of new entrants will make for interesting times


by julian Ingall, director,


Coreco Specialist Funding


It has been an interesting few months to say the least in the specialist lending market. Whilst dragonfly has been busy spreading their wings and hovering into every nook and cranny, i wonder if they really noticed the candy brothers to their left and Mr cleary to their right? cleary and his formidable team at Precise Mortgages need no real introduction and with the elegant Liz Locke and infamous Mr Munford assisting omni capital in its new show, what is this party all about and what does it mean? Why are we suddenly seeing as many bdMs from lenders in this arena as those in the residential space?


Cash Is the ansWer in recent times the dominant funding force has been octopus investments – which backs dragonfly and more recently announced a funding line to borro - with a mere £1.5bn under management. the question now is will the shaken, not stirred, candy dynasty now start to push into this space after the launch of omni capital? or is the arrival of elliott Associates, Precise’s backers and one of the world’s top 10 private equity funds, be potentially more of a concern for dragonfly’s Jonathan


18 bridging introducer july 2011


Samuels and his team after they have rightfully captured pole position in the last 12 months? there are various statistics about the size of the bridging market but most would agree this growing niche market is about £1bn per annum. it is however becoming increasingly skewed to the South and changing its shape towards larger lending on residential development projects rather than straight bridging. this is where the top guns now want to hang out. Whilst the banks are still sleeping or pondering about every lending decision, it is little wonder that this space is becoming more interesting to developers and private equity houses as a way to either acquire property or receive the necessary return on their pledged cash.


ChangIng tImes this space has changed significantly in the last six months and is becoming increasingly dependent upon the depth of a company’s pockets, where the assistance of securitisation is unlikely/never going to be achieved. this market has historically been made up of private funders but can these old timers really compete with the new top guns if they don’t change their funding ways? What i like about all of the


aforementioned is their attitude towards making the market more professional and doing the right thing: transparency is the key. not only that, their lending is in the main sensible and all about doing the right thing ahead of


the expected regulation of the market.


lendIng In lOndOn How have the lenders in this market changed? the focus more than ever is now at the London top end, entering the space where only banks used to tread. too many developers have been let down by delay and changes in policy by most of the recognised names in the clearing market, most having to state for political reasons that they are lending but then taking many months procrastinating. this has given the opportunity for other banks and bridgers to step into this space, many of whom we have now come to respect for their delivery and execution.


pushIng bOundarIes So, with the launch of Precise offering some interesting extras, like an 18-month bridge, prescriptive legal costs along with a punchy loan to value, boundaries are being pushed, mainly through increased competition. the funding term of 18 months, whilst to most may seem quite a logical step and not that significant, is however difficult for some of the smaller bridgers to match unless you have scale and the cost of funds are low enough to absorb the longer turnaround. can Precise or omni capture top spot from dragonfly? Whoever emerges as the ultimate top gun, i’d say a big well done to you all for pushing boundaries in lending where others fear to tread.


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