While I believe some in the industry may have overestimated the growth of the sector, what’s not in doubt is that it is bigger than it has ever been, as well as more dynamic, robust and respectable.
Bridging, quite simply, has grown up and brokers are increasingly waking up to the problems it can solve.
New lenders have entered the fray, new standards are being adhered to and we are seeing many new products being launched, offering real diversity to introducers and their clients.
The arrival of new lenders has meant that rates have also come down massively, with Dragonfly Property Finance’s recently launched bridge-to-let product, for example, offering a bridge at 0.749%pm.
Bridging will never be a mainstream loan product — and rightly so — but it is certainly now an established alternative finance channel. It is no longer seen as the loan of last resort, the black sheep of property finance.
Bridging loans can be small and straightforward and they can be large and extremely complex, but the slickness of the lenders means that even the most complex of loans can be arranged in ridiculous timeframes.
For example, we recently completed a £6m bridge with West One Loans in five days and have completed other deals in even less time.
Some outside the industry have pounced upon the FSA’s interest in retained interest as being a set-back for the sector, although I would say it’s the exact opposite.
The FSA’s interest in retained interest is simply part and parcel of its increased interest in the sector as a whole — and the regulator is more interested in the sector because it is now infinitely bigger than it was pre-crash.
More than anything, perhaps, the FSA’s interest in retained interest, an interest-charging method of a once obscure sector, is proof-positive that bridging has emerged from the shadows and arrived.
All in all, the bridging sector is now well positioned to continue to grow and establish itself as a major and reputable finance channel. What’s most important is that it doesn’t let itself down but keeps standards high.