Lender: Why we only lend outside the M25

Lender: Why we only lend outside the M25


Bridging Finance Solutions Group is an independent finance house, providing short term property finance solutions to individuals, investors, property developers, professional advisors and intermediaries.  With their head office in Merseyside, we speak to their founder and Managing Director, Steve Barber, about the bridging market beyond London and the M25.

With its roots in Merseyside, the company has seen 30% increase in turnover in the past twelve months.  Whilst much of their business is still generated within the North West region, they find that increasingly the geographical spread of their lending footprint is getting wider. However, London is not currently on their radar.

Merseyside is still their top location in terms of loan volume; historically this makes sense as the company was founded here in 2006.   Beyond Merseyside, North Wales also represents a considerable market, closely followed by Cumbria, Lancashire and Yorkshire.

Why these regions?  Bridging Finance Solutions’ success is down to organic growth, achieved mostly through word-of-mouth recommendations from satisfied clients.  It’s a ripple effect, which translates into business being generated within a fairly localised area.

These areas have a large percentage of housing stock in terraced and semi-detached properties which fall within the small investor/developer affordability and often generate double digit returns as rental values have not fallen here in line with capital values. 

The geographic bias is evidently still on the North West but lending is by no means restricted here.  With online applications, national industry events and a partnership with a national auction network, they have assisted clients from as far afield as East Anglia and Northumberland. In the first half of 2010 alone they saw a 42% increase in lending outside of the North West and in recognition of this and to reflect their national expansion plans, the business rebranded in July 2010 from Bridging Finance North West to Bridging Finance Solutions.  But how does London fit into their plans?

However, as Steve observes, the property investment landscape in London is totally different to the regions and there are two main reasons why lending within the M25 does not currently feature in their growth strategy.  He explains, “Firstly, London is a very specialist market where property values are much higher than the rest of the country. As a smaller lender we like to spread our risk over multiple smaller loans rather than fewer large loans.”

He continues, “Secondly, we underwrite backwards, from the ability of our applicants to obtain Buy to Let Finance. The majority of our exits come from Buy to Let mortgages. Outside of the M25, property values are generally much lower, making property investment more accessible to small investors and builders as they can achieve higher rent yields. There is still business growth in this market and I have seen more buoyancy within the small investor property sector of late.”

There is no doubt that the property market in London can be lucrative and competition between lenders is intense. However, this is not the reason Bridging Finance Solutions choose not to lend inside of the M25, “We are a specialist lender and operate within a niche market.  I believe there is business growth within this market, without trying to compete against larger lenders in the crowded London market place. We know what we are good at and whilst we have our sights set on national expansion and will be making an announcement about this shortly, for now, we will continue to concentrate on the regions.

Commenting on the possibility of lending within the M25 area in the future, Steve coyly replies, “Never say never!”

Leave a comment