Ying Tan

Are mortgage brokers engaged enough with bridging finance?

One need only look at the number of recruitment and promotion stories coming out of the bridging sector right now to recognise the buoyancy of it.

As we have said many times, the current situation in the property market (particularly the buy-to-let sector) presents huge opportunity for bridging, and providers and specialist brokers are clearly preparing for this. 

However, bridging is not the only sector in our industry which is on the cusp of big things. Indeed, since 2014 the second charge sector has been slowly growing in prominence. While it’s some way off from its heyday, the attention it has received as a result of the Financial Conduct Authority taking over responsibility for the sector has had a significant impact.

But despite the growth in popularity of second charge products, most would argue they’re still not being utilised to full effect. And there seems to be one primary reason for this: brokers aren’t fully interested. 

The need for sound financial advice from an independent broker is growing. The market is becoming more complex and an increasing number of borrowers are recognising the value of brokers. This means that in many ways brokers are steering the market. 

If brokers are not interested in second charges and are not willing to explore them fully as a possible solution for their client, there is little chance of consumers opting for such a product. 

I wonder whether bridging may encounter the same problem. 

Obviously there are occasions in which the need for a bridge is obvious. When consumers need stop-gap finance they’re likely to ask about a short-term loan anyway. But there are many more innovative and creative ways in which bridging finance can be used – ways which brokers would have to outline to their clients.

So are mortgage brokers engaged enough with bridging finance to really drive this market forward? Do they understand the product enough? Or, at least, have access to good partner firms to which they can refer clients?

This year could well be a major one for the bridging market but, like all niche sectors, broker engagement is key. Providers, packagers and specialist brokers need to be educating mortgage intermediaries, building relationships and promoting the products so that bridging can really achieve its potential this year. 

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