the Last Word


overall the level of comprehensive


advice impacts the lending decision much more than the location of the customer and highlights a real opportunity for brokers to increase their potential client base and income. the key to capitalising on areas


outside of the M25 is to form strong partnerships with specialist lenders who can support and complement clients’ requirements in today’s market throughout the uK.


Gavin Diamond, finance director, Cheval


the gap between London residential property prices and average


values in the rest of england and Wales is at its widest for ten years, according to recent research from Savills. it shows that a typical home in London is now worth 113% more than the average, compared to a differential of 73% in 2005/06 and just 47% in 1995. With this in mind, no one should


be particularly surprised to discover that bridging lenders typically feel more comfortable securing their loans on London properties than anywhere else in the country. After all, if a transaction goes sour, it is likely that the short-term lender will have to look to the security to recover amounts due. this is basic economics and all providers of secured finance would include basic factors such as house price values and local market buoyancy in their decision making. As a result, transactions within


the M25 are the subject of intense competition between lenders. And the increased competition for deals in this area has contributed to products being designed to capture


business, often at lending rates that are seemingly unsustainable in the longer-term. However, to claim bridgers are


actually reluctant to lend outside the M25 is over-interpreting the reality. it needs to be remembered that


there are bridging loans completed outside the M25 every day of the week by a range of lenders, including cheval, which are more than comfortable lending outside greater London to those with propositions that stack up. Many lenders, particularly


those based in the South, are uncomfortable lending in Scotland as not only is it geographically further away but the legal process is quite different. However, for lenders such as


cheval the principles remain the same: if the application is convincing, we will lend. good deals should always be able to find a home.


Colin sanders, chief executive officer, Omni Capital


there are a number of sound commercial reasons why


London – both its prime central districts and the wider metropolis – is a key area of interest for providers of bridging and short-term development finance. First, and critically in these


uncertain times, it is relatively easier for lenders with a London-centric strategy to secure funding. typical borrower profiles are generally of a higher quality, average loan- to-values lower and the return on investment more secure. Add in the robustness of London property values – underpinned by continuing investment from cash-rich


36 bridging introducer september 2011


international buyers – and it isn’t difficult to understand why funding tends to find its way to lenders with a focus in the capital. next, bridging lenders operate


on a smaller scale than most of their mainstream counterparts. As specialists, it is more efficient to concentrate on areas they understand well, including how geography and demographics influence property values. With other parts of the uK experiencing severe swings in the wrong direction in recent years, London continues to offer something of a safe haven. but signs are emerging that the


bridging sector is opening itself to a wider geographical remit. by way of example, omni capital already includes in its portfolio properties in the Home counties and across the south-east of england. in each case, commonsense lending decisions were based on sound facts provided by the introducing broker or sourced in-house.


Alan Cleary, managing director, precise mortgages


this is little more than a myth. it may be true to say that smaller, London-


based bridging lenders may restrict their exposure to their own neighbourhood, but likewise bridging lenders in Manchester may typically concentrate their lending in the north West. As a serious player with a national


distribution network and valuation partners offering coverage across the uK, Precise Mortgages is able to consider all strong lending opportunities regardless of post code. While the majority of high value loans are typically within


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