I also attended the NACFB dinner last Thursday as a guest of MT Finance, so will try to give this blog a bit of a bridging bent as opposed to the commercial. This is on the basis that everyone knows that bridging is much easier to write than commercial and I won’t have to tax my brain as much as normal haha.

As regular readers of this blog may know I used to work in the City in my younger years and ended up on a foreign exchange dealing desk for my sins. In many ways the FX dealers were the bridging boys of the City – the ‘barrow boys’ giving it large and a breed apart from the more analytical bond and equity traders.

Sitting next to the bridging team in the office you can sometimes get the same impression as they are flying through their cases with little more than a one page application form and a generous proc fee, but this impression isn’t correct.

From the outside looking in it appears that all of the new entrants that have entered the short-term market have caused a crystallisation in the points of difference between the lenders and that has been to the benefit of brokers and borrowers alike. There are lenders such as Shawbrook, Precise etc that offer the lowest rates, but undertake a fairly comprehensive due diligence on their borrowers.

There are lenders like MT Finance that have identified their niche and offer a very quick service with less due diligence, but charge higher rates as a premium for the perceived additional risk. Finally, there are lenders that have identified particular sectors or property types that enable them to charge a premium on their products and not lose out in a pricing war with the bigger funders.

This all works nicely for well-connected and knowledgeable brokers, but for intermediaries that just dabble in bridging now and again how confident are they that they are giving their clients the best options with so many lenders in the market? We have already seen from our personal experiences in the office that networks are looking to move regulated bridging cases onto specialists like Brightstar (disclaimer: there are other distributors that you can choose) because of issues around compliance and best client outcomes. As the new regulations and FCA oversight begin to bed in I can only see this trend increasing and impacting across all the specialist areas.

Just to finish off on a more commercial note I can foresee that the rise in new lenders in the short-term sector will be mirrored in all the specialist sectors as funders seek out the premium rate parts of the market. This will lead to more product choice, but will focus compliance minds for the best client outcomes.