As the specialist lending market becomes increasingly competitive and lenders look to compete for market share, more have turned to special promotions to attract business.

In the past year, lenders have launched spring and Christmas offers, while some have cut valuation fees for certain periods. 

Are lender promotions necessary?

Market Financial Solutions is currently offering free valuations on all residential bridging loans, and Paresh Raja, the CEO at the lender, felt that this created an added incentive for brokers when considering bridging finance.

“For brokers who are not familiar with our tailored bridging loan products and services, loyalty packages or special offers are an ideal way of introducing them to our specialist finance solutions. 

“In our experience, brokers tend to go with specialist lenders who are transparent, clear and honest – that’s why we use special offers to ensure our bridging loans are competitive and achieve the best possible outcome for both our brokers and the borrowers they are managing.”

Jack Coombs, director at Aspen Bridging, added: “Aspen has seen a great response from our exciting spring offer, although we think the best approach is to consistently offer a good deal to brokers and customers alike and treat customers fairly rather than relying on one-offs.”

Recently launched bridging lender Glenhawk said it offered the same promotions at all times as it endeavoured to always be transparent and fair to its brokers. 

“We promote our terms every couple of weeks, including no admin, exit or extension fees and we notice a significant uptake in client demand on the day the email goes [out],” said Guy Harrington, CEO at Glenhawk.  

“Coupled with paying brokers on the day of completion and interest being calculated daily, we offer a straightforward product for their clients.”

However, Jonathan Sealey, CEO at Hope Capital, said it didn’t really find that short-term offers worked with brokers. 

“When we have trialled such an approach, we have never seen any real increase in business. 

“In some ways [it] is reassuring that most brokers are not influenced as much by price, but what appears to be the right loan for their client.

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“This is the way it should be as price is only one element of a bridging loan; surety of decision, transparency of fees, flexibility, service and speed are nearly all more valuable [than] price alone.” 

Simon Chapman, relationship director at Amicus Property Finance, added: “While headline rates and incentives may serve a purpose at the volume end of the market, it’s not something we do. 

“Ultimately – who is it serving?  

“A specialist lender has a responsibility to ensure a deal is structured appropriately for a borrower, as well as access to funds quickly up front and throughout their project.”

Tomer Aboody, director at mtf, said it did not offer discounts or special offers to brokers as it was the company’s ethos that it should be competitive, effective and relevant in the marketplace without compromising on its pricing model.

“Our prices allow us to be competitive while offering the best service to our customers. 

“We are constantly looking to improve our service through constant engagements with our introducers. 

“This keeps us relevant and in touch with what a broker needs.”

Are brokers influenced by promotions?

“Promotions are as important in the broker lending market as they are in any other industry, so long as they do not disadvantage the borrower,” said Zed Lorgat, practice principal at JM Financial. 

“It’s natural for brokers to be attracted to promotions and from a lender perspective it can drive business for a period of time [that] the incentive is running.

“In fact, I would go as far as to say a broker not knowing about promotions could even be seen as not having their eye on the latest news in their field.”

Dale Jannels, managing director at AToM, added: “…We have to offer the customer the most appropriate deal to meet their needs and requirements.  

“However, if two similar products are researched and one has a specific broker promotion, then obviously, subject to it not being detrimental to the customer, I’m sure this would be taken into consideration.”

Meanwhile, Stephen Burns at Adapt Finance, said: “[We have] no interest in promotions whatsoever and it does question the need for lenders to offer such.”

What do brokers want lenders to offer?

“Rather than gimmicks, I would rather see lenders have a very simple pricing structure and offer the most competitive package they can for the borrower,” said Chris Whitney, head of specialist lending at Enness. 

Andre Bartlett, director at Capital B Property Finance, added: “I would like to see offers that benefit the client.

“Reduced valuation fees and legal fees. 

“The scrapping of indemnity costs being paid by the client would be a good offer.”

Zed felt that offers that could be shared or passed on to staff and clients as a bonus were good incentives.

“Apart from enhanced commission, I would say that if a promotion is run, make it fair and attainable. 

“Running an offer that a broker feels they couldn’t achieve in any event wouldn’t be seen in [a] positive light. 

“Let’s be honest, we all love a little extra added value, every little helps.”