What was once deemed as a last resort rather than a respectable option for securing a short-term loan, has now become an exceedingly popular solution on the market. Mainstream banks have proven increasingly unable to meet borrowers’ more complex or urgent requirements, be this due to the speed of a decision, certainty of approval required, or simply a lack of flexibility. Consequently, bridging finance has become an important market for supporting this underserved space and one that is certainly here to stay. Bridging finance is a far-cry from the market it once was, when the like of Tiuta controlled and dominated the space. Now – aided by the outstanding efforts of numerous market-setters – bridging finance has become more accessible and accepted than ever before, moving away from the encroach of regulation it was once suffocated by. As with most, the bridging industry has become largely preoccupied with post-Brexit uncertainty over the past few months, with some borrowers unable to renew or extend their loans as expected – making the need for quick alternative arrangements even more pressing. However, this is where bridging finance has come into its own – as a lifeline for all types of short-term finance. Whether it’s the wider availability it provides or the reliable speed of deployment, bridging finance sets itself apart from traditional lending as an equally well-financed and very liquid market, with a vast range of funding sources available. Bridging Trends Index Q3 The Bridging Trends Index demonstrated that month on month, the biggest use of bridging finance was due to ‘mortgage delays’. This is often due to traditional financing taking too long to implement, thus not meeting the borrower’s timescale. However, it is not just the speed of finance that has boosted its popularity. Many people presume that bridging lenders have a high risk to reward ratio, yet the industry has actually reported loan to value ratios overall of sub 60%; lower than the majority on the high street. The industry has also seen added pressure on the cost of funds, as average interest rates fell below the 10% mark. With the average monthly interest rate now at 0.85% (the lowest on record since Bridging Trends’ launch), plus an average loan to value of 46.9% and a £49.38 million increase in lending compared to Quarter 2, the space is clearly moving from strength to strength.   A growing market for short-term finance The nature of the bridging market is highly fragmented, causing the industry to be made up of smaller lenders rather than being dominated by a handful of key lenders. With new entrants coming into the market thick and fast, competition has undoubtedly been heating up and pushing the cost of funds down as a result. Chris Whitney, Head of Specialist Lending at Enness, added: ‘Competition is always good news for consumers, but the nature of the bridging market can make it hard to access the very best solution to their requirements. In response, some of the key intermediary brokerages are setting up specialist teams to provide advice in this expanding and adapting part of the market.’ There is no denying that bridging finance can be a distorted and complex market, which requires skill and specialism to navigate successfully and achieve the best solution for a client’s situation. Which is where we come in! Enness Bridging Finance is designed to support clients and allow them to achieve their goals in the quickest and most fuss-free way possible. We are extremely well networked and skilled in this market, with the assets of our wider business profile adding real value. We will remain focussed when dealing with finance that is complex, fast-paced and pressured, in an area of the market where negotiation, creativity and trust remain as central to success as it is to our philosophy.]]>