I am sure there is going to be plenty of press of the looking back and looking forward variety in the weeks to come. It is the time of the year to take stock and make predictions and I am sure we are all going to see a lot of coverage from the great and the good. For my part, as someone at the coalface of the bridging market on a daily basis, I want to take a look with a view to what really affects brokers and their clients and what I would like to see coming down the track.
Talk earlier this month of a £3 billion bridging industry would have raised eyebrows even a year ago and yet here we are in a situation where the steady upward growth trend this year is already nudging that number. New lenders and new sources of funding have been part of that growth spurt, but let’s not forget that the infinite flexibility of the product has produced a facility which covers so many areas of the lending spectrum. From simple stop gap funding at auction, it has developed into having a veritable smorgasbord of uses as a significant source of development finance, serious support for BTL lending as well as an important source of emergency funding for personal or business uses.
2016 should also be named the year of the cast iron bridging exit strategy. While rates are at their lowest for all types of lending, clients who allow their bridging loans to go over the designated period are putting a lot of pressure on themselves financially and it is not definitely clever for an adviser if the exit is fudged. In the BTL sector, bridging finance is becoming a go to source but I want to see fewer clients coming to us without a strong workable means of exiting their bridging loan. There are lenders still prepared to accept weak explanations but the implications can be particularly serious as some of the penalties can be scary.
In 2016, one of the indirect effects of the MCD will be to provide a further incentive to ensure that the industry does everything it can to ensure that clients get into bridging with as good an opportunity to successfully exit and the intermediary community will need to play its part.
I have no doubt that every bridging sales director and BDM will, having had an excellent year in 2015, now be looking at ways to sustain the progress made as expectations will be high in every boardroom to improve further on 2015.
For specialist packagers like us, we are also looking to see a continuation of the successful recipe of lower rates, more choice and greater competition for business among a growing number of lenders. Allowing market forces to lead the market has, so far, been good for all parts of the chain from lenders to borrowers and in 2016, I see that combination continuing. Unlike some, I do not see the MCD as a brake on future new business. The industry is already adjusting to the requirements and challenges posed and will be the stronger for it, both in terms of quality and competence in 2016.
We will be concentrating on a continuing programme of broker master classes which have proved popular this year, particularly with our network partners. It is clear that intermediaries, even the most experienced, are keen to learn new skills. That attitude speaks well for the future of the quality of advice and will help improve customer outcomes.
2016 will see the more forward thinking specialist packagers taking advantage in the latest technology field, particularly in the area of application submission and sourcing. With greater emphasis for brokers to demonstrate evidence of research, being able to access a clear, verifiable audit trail will be a vital component in choosing a specialist partner and Complete FS intends to continue to be at the cutting edge of what technology can offer.
Technology, particularly in the bridging market, needs to be considered as a helpmate rather than a total solution. Human experience and understanding of each applicant’s specific circumstances is the most vital part of what we offer. It is going to get harder to find that level of talent and we are fortunate to have made some key hirings recently as I do see a situation where there is definitely going to be shortage of people with the right skills.
Finally, as the talk at the pumps is a possible return to petrol prices actually dipping under the £1 per litre mark, the only other wish on my list to Father Christmas is that we see average bridging rates dip under the magic 1% per month mark. Perhaps wishful thinking, but it would help towards further increasing credibility for the long term.