Why bridging lenders can be optimistic during these times

Disruptors come in many forms, and our team has expanded ten-fold in 18 months.

In July, PLS expanded its technology offering through its new Alexa Skills App, askPLS, and the secured lending team announced its growth ambitions and optimism for the lending sector.

In just a year and a half, the department has gone from a one-person operation working on small-scale lending opportunities, to working on some of very exciting developments, including one in north-east London totalling 25,000 sq ft.

Our plan for the next five years is to be one of the country’s leading bridging solicitors.

Adittedly, there are challenges on the horizon and it is difficult to say what the future holds, but as the technology portfolio at PLS develops, the firm will be difficult to surpass.

Our success so far has been down to recruiting the right people, our technology and workflows — I believe our ambitious figures over the next few years will certainly be achievable.

The technology that PLS is developing includes expanding its 24/7 portal – software that allows all parties within a transaction to receive updates and manage documents from their tablets and iPhones. This system is available to the conveyancing teams at PLS and is being developed to be utilised by our lender clients. It will have the capability of being white-labelled for lenders, which will be a strong selling point for brokers and referrers.

It is inevitable that lenders have and will continue to face difficulties. Before the pandemic, many lenders had set aggressive plans for the expansion of their loan books and had more of an appetite for risk, but, now, are having to operate much lower LTVs and increased interest rates. Lenders are also avoiding more complex development deals due potential delays in construction and down valuations which hinder exit strategies.

Despite this, I believe that the development finance sector can be optimistic as, even at a time of crisis, the government will want to support new projects. I also think that there should always be strong demand within the bridging sector. The ways in which short-term lenders can offer a flexible and fast approach to borrowing will always be attractive to those who need finance, especially those who have recently suffered delays with mortgage providers. 

The next 12 months are undeniably going to be a struggle for all lenders and their panel firms. It is much harder now for investors and developers to obtain finance than it was before, suggesting that many lenders will need to adjust their lending products substantially — which will take time.

We hope to see the number of new lenders entering the bridging market increase again in the next year or so, which is something we witnessed pre-pandemic. Those that entered the market just before Covid-19 may hold back until the market picks up again, while the more established lenders, I believe, will continue to proceed cautiously over the next six to 12 months, but we will hopefully see a lot of growth thereafter.

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