Deal opportunities remain strong, latest survey reveals

Deal opportunities remain strong, latest survey reveals


Mathon, one of the UK's leading asset-based lenders in the commercial property sector, has published the findings from its latest survey which indicates that the UK bridging loan or short term finance sector in 2008 has not been as badly affected as some reports suggest .

Key findings include:

• 88% of respondents stated that the quality of leads in the marketplace remain as good as, if not better than, in 2007


• 70% of respondents would prefer to do business in person or over the phone as opposed to online, marking the demise of the previous "tick box culture"


• All respondents noted that service and delivery were the top two attributes they prioritise in a lender


Although the downturn in the market has been well documented the research suggests that potentially strong deals are still circulating and in need of finance. The priority in the current market rests on the broker’s ability to package these deals in a way that meets lenders increasing stringent criteria.

The research suggests a warning to lenders who rely too much on online applications. Brokers prefer a more traditional approach – citing service and delivery and one-to-one telephone relationships as the most important attributes in a lender.


Andrew Sobolewski, Chief Executive Officer, Mathon, commented:


“The commercial bridging sector has had to adapt and diversify in order to continue being a much valued feature of the UK property finance market. Whilst the sector remains under-researched, we can see from the results that despite the economic downturn, the level of deal flow remains robust.

“Findings from our research help provide a much clearer picture of the current mood and shape of the marketplace. By reviewing this kind of analysis, we can maintain the provision of unparalleled customer service by understanding Mathon’s client requirements and market trends.”

Other findings include:


• 69% of respondents said their business had at least remained the same or grown since this time last year


• 56% of respondents said their average loan size had increased in 2008, with an average increase of 22% across the board over 2007. However, last year 91% reported an average increase in loan size of 32%


• Over two-thirds stated that less than 20% of their business leads were made of distressed and/or auction sales, yet lending criteria such as LTVs are of increasing importance to brokers as they try to place deals


• Almost all of the respondents have placed unregulated bridging in 2008 and it was reported that, on average, unregulated bridging accounts for 72% of the business placed


• 70% of all bridging loans business can be attributed to the following:

·         property and land acquisition

·         refurbishment or redevelopment and

·         purchase at undervalue


• 44% are confident that the market will return to the pre-credit crunch level within the next 12 months.


This, the second such half-yearly survey, follows one carried out in November of last year, and draws its findings from Mathon's databank of circa. 1000 participants in the UK bridging loan market, including commercial finance brokers, IFAs, property developers and investors as well as bankers, solicitors and accountants operating in the bridging finance arena.


Leave a comment