Rob Jupp, CEO at Brightstar Group (top, left), hosted the session, which included industry stalwarts Marc Goldberg; Mark Posniak, managing director at Octane Capital (bottom left); and Tomer Aboody, director at MT Finance (bottom right).
After kicking off the conversation by asking all three leaders what journeys their business’s had gone through as a result of Covid-19 so far and how they had been able to adapt to new challenges, Rob sought to find out what Marc’s current thoughts were on the market, and what he predicted the next 12 months had in store.
“I’m cautiously optimistic; I think we’ve all got to be mindful that we are in a bubble and, at some point, it’s going to burst,” he replied.
“I think main high street banks and some of the other lenders who I think don’t really understand the market, are not going to be able to lend to good quality customers where they will require short-term funding.
“I can see our market next year being really exciting.”
He believes there will be a few lenders who will not make it out the other side, due to the LTVs they may have gone up to previously and how they had underwritten deals.
In addition, some lenders may face problems just down to market sentiment and conditions.
“But …I am extremely positive about third and fourth quarter [of] 2021.
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“…It’s going to be very much about opportunities and those [who are] the strongest will survive this and come through the other side, I think, far better.”
Marc expects that there may be some lenders who will struggle to raise funding, and a proportion that will default on their bank covenants, resulting in their loan books becoming available to buy.
“I know a few brokers that I have spoken to are also looking at maybe merging, buying different ones, downsizing, so … there will be consolidation in the lending and the broking [industries]…”
Rob asked Mark Posniak what his opinions were on the short-term lending market for 2021-22.
“If we can avoid a second wave or, with the technology and the learnings that we’ve had over the last four months, soften it, and if the recovery is V-shaped, I am very optimistic for the back-end of 2021 and into 2022.
“…We should all count ourselves lucky that we’re in such a dynamic environment, and such a dynamic industry which allows us to operate in both the good times and bad.
“Because when times are tough … and the banks are nervous and cautious, [borrowers] come to the alternative lenders like ourselves.
“When times are good, and they need to move quickly, again, the banks can’t typically operate at that speed, and they come to people like us.
“So, I think there’s a huge opportunity, if done correctly and if you’re measured in your appetite and approach…
“But there will be consolidation, there will unfortunately be loss of jobs, there will be loss of lenders, there will be loss of brokers,” he added.
Tomer thinks that there will be massive incentives from the government, predicting that the stamp duty holiday that was announced last week, will be extended.
“They need to re-boost the market and the economy … and housing is the first sector that has to be promoted,” he urged, explaining that it plays a big part in the UK’s recovery as it employs many people.
The video, which discussed a surge in “shambolic deals”, where LTVs should be in the bridging market, the impact that Brexit will have after Covid-19, and predictions for the sector in 2021-22, can be viewed in full, below.