the fact that two sets of solicitors are involved in the same deal. Separate representation is the norm in the bridging market whereas the oppo- site is true in the long-term market, which is why we decided to launch joint legal representation on our bridging products. In my opinion this will knock several
days off completion times and at the same time will save customers signifi- cant sums on their legal costs.
Maximise your income opportunities In a challenging market it is important to maximise as many income opportuni- ties as possible and getting active in the bridging market is attractive. Proc fees are higher compared with the mainstream market and while the effort required is generally higher the average proc fee of 1% acknowledges that.
In addition many bridging cases will
require customers to find a longer-term mortgage and this should be an area where the broker also gets involved. On top of that many of the customers in this market will be professional land- lords who will repeat the cycle on many occasions so a long-term relationship is likely. To consumers the bridging market must look complicated so the need for them to engage a broker to help source the correct mortgage is paramount. In many cases customers may have tried and failed to get funding from their traditional sources so the role brokers play is all the more important. Indeed from a broker’s point of view unless they are dealing with bridging cases on a regular basis the market may look complicated to them. Help is always at hand as there are
many options available if you need help in placing a case. Precise Mortgages has an approved panel of packagers, which we call our premier panel. Alternatively, you can ring our dedi-
The
cated underwriters who will be happy to help you and in most cases will be able to give you a decision in just a few minutes.
In my opinion… The forecast for 2012 is somewhat sub- dued as the likelihood of any growth in the overall mortgage market looks low. But there is some optimism that the buy- to-let market will grow, which in turn should increase the amount of funding available to bridging lenders. There have been some high profile lenders entering the buy-to-let market recently and it is possible that we will see more. This should increase the availability
of mortgages, which in turn puts down- ward pressure on pricing, making it more attractive for landlords. In addition there appears to be no let- up in tenant demand and there are plenty of signs that this will continue in the medium term. The bridging market has changed sig- nificantly over the last few years and most notably customers’ needs have changed beyond recognition. Nowadays the typical customer is a prime one and in a lot of cases high net worth, requiring funding for many dif- ferent purposes. The banking system’s difficulties are
well known and their exit from provid- ing funding to many of these customers has opened up a new market for bridging lenders.
But lenders and brokers be warned – these customers expect to be treated well and anyone operating in this market should uphold high standards. There are still some dubious practices going on and transparency is still a long way from optimal, as is the practice of paying proc fee overrides. The bridging market is likely to see
growth in 2012 and brokers as well as mortgage networks and clubs should be positioning themselves to best explore this opportunity.
guide to Bridging Finance 2012 11
GUIDE TO BRIDGING FINANCE
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