In light of the increase of lenders entering the bridging sector, Jonathan Samuels, CEO of Dragonfly Property Finance, explained to Bridging & Commercial how to differentiate between lenders’ products and who’s ‘talking the talk’ and those who are ‘walking the walk.’

There's been a huge influx of entrants into the bridging sector of late. This is great news, as it's keeping us all on our toes, placing downward pressure on rates and driving product innovation.

A dynamic and fast-growing sector is a healthy sector and therefore, at Dragonfly, we welcome it. It's a winner for brokers, lenders and clients alike.

For brokers, of course, this diversity of providers is as challenging as it is welcome. How do they choose between the ever-growing number of lenders? What are their differentiators? What's the difference between lender X, lender Y and lender Z?

As we see it, rates and criteria are important but they are by no means the most important thing when choosing which lender to use. The most important thing, by a country mile, is the certainty that the lender will pay out. 

When brokers consider which lenders to approach, the first thing they should look into is loan volumes. Exactly how many loans has a specific lender made over the past 12 months? They should ask about — and compare — redemption levels, as they reflect liquidity and the strength of the lender, as well as its transactional activity.

In other words, brokers need to ask this: is this lender walking the walk or it is simply talking the talk?

And on the subject of new entrants into the market, how long will this growth spurt last? How many more lenders can feasibly enter the market before it reaches saturation point? As we see it, we're not far from that point.

Indeed, we could see some serious M&A activity over the course of the next two years, as the sector consolidates and rationalises.

As with many other sectors before it, the bridging loans sector could mature into a market of bigger players and niche ones, with little room left for those in between.