The first quarter of 2015 has flown by and here at Brightstar, we have seen our best 3 months of business in all divisions, since we started the company a little over four years ago.
With four specialist industry sectors (Specialist 1st charge mortgages and buy to Let, 2nd charge loans, bridging finance and commercial finance), this is a good indicator that all specialist sectors remain in excellent health and looks like 2015 will continue to be a year where we see growth.
There has been speculation over the longevity of the specialist market and the bridging sector in particular has had its fair share of pessimists who can’t seem to wait to announce that the market has slowed and is in decline (not too sure why).
This is not a view I share and not just because I work in the sector. It is becoming evidence that the Credit Crunch served much like any other disaster (although this was a very man-made disaster and not a force of nature).
It turned our World upside down and shook it until it broke. Then dropped us on our heads and let us stagger about, dazed and confused, licking our wounds and wondering what went wrong. Of course now we have emerged ‘out the other side’ and things are ‘normal’ again (although some may say things will never be ‘normal’ again), what it has done is reset the balance.
Specialist no longer sits next to super-prime. There is a healthy gap in between and so there should be. When this gap gets too small and specialist becomes mainstream, then once again, we shall be in danger of another financial crisis. That is not to say that the Specialist Markets and High Street products cannot co-exist together.
I like to think of them more as cousins than siblings. They are related but they serve different purposes. Ultimately it is about providing sustainable and accessible funding to individuals and businesses.
Let the High Street lenders take care of the super-prime, vanilla, borrowers, that pose the lowest credit risk and pricing is so cheap, I wonder how any profit is made at all. This versus the specialist sector where things aren’t necessarily any ‘less prime’ but there is usually a story involved.
It is slightly more complex in the nature of the enquiry and the funding requirements are usually not catered for (in the main) by High Street lenders. What is wrong with this? In my opinion, nothing at all.
Specialist sectors exist for a reason. The existence of the two markets makes much more financial sense than the pre Credit-Crunch World where high LTV, self-cert mortgages were available to credit impaired borrowers.
The lenders in the bridging market, along with challenger banks have in my opinion carved-out a permanent place in our financial world that exists to compliment the mainstream lender offering and in many ways is leading the way forward with product innovation, criteria and underwriting processes. Long may it continue.
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