In bridging, relationships between brokers and lenders are cited as one of the most important aspects in any deal, which is why repeat custom from valued brokers is always coveted. For lenders, however, it is also important to try and secure business from as much of the market as possible. Companies are therefore faced with the difficulty of both focusing on earning repeat business from existing brokers and constantly striving to obtain new custom.
Sales and Marketing Director for Masthaven Group Ltd, Richard Deacon, explained that it is quite tricky trying to gauge what proportion of lending relates to brand new brokers and what relates to repeat custom. He said: “We are probably like the majority of lenders whereby we get 80 per cent of our business from 20 per cent of our brokers.”
Although a lot of lenders highlight the importance of a core loyal broker base, one company – which only really began to focus on bridging nine months ago – has a different spread. Allison Robinson, of Heritage Asset Finance, said: “Around 50 per cent of our business is via brokers, 20 per cent referrals, 10 per cent direct and 20 per cent repeat. We are finding that our repeat business is growing and we expect to have doubled by this time next year.”
Precise Mortgages’ Managing Director Alan Cleary also revealed that the lender has seen an increase in the levels of new business. “July was our best month so far for applications but August is running at nearly double that level; ten working days in we are at £9 million and there are 11 working days left.” Taking into account the fact that this is during the summer, post-Olympics, it appears to show an even more considerable increase in bridging demand.
Richard emphasised that Masthaven has “worked very hard over the years to lift ‘Masthaven the brand’ into the mind of all brokers who would deal with a bridging loan, but it is a bit like the fourth bridge (if you’ll pardon the pun) because whenever you think you have done your round of visits and meetings (etc.) you find that you have to go back to the first firm you have visited as it has been eight weeks since you went to see them.
“Even with all the advertising and marketing that goes on, you simply cannot beat a face to face meeting ‘talking turkey’.”
Precise has focused on steering some of its existing whole-of-market brokers towards bridging as an option. Alan added: “What we are seeing are brokers, who are not necessarily new to us – they may already utilise our near-prime or BTL products – but who are new to bridging, increasingly turning to it as a financial solution.”
Richard commented, “I am a big one for education in bridging, in all forms. I think the work that the lenders have done, with the help of the media, has assisted the industry no end, as there are an awful lot more introducers out there now who know what a bridging loan is than there were three years ago, and that can only be a good thing.”
Allison, too, agreed that education was positive. For Heritage, however, brokers predominantly become aware of the company’s services through referrals.
She explained: “At the moment our business usually comes to us because someone has referred us. We have just become Patrons of the NACFB so when a broker contacts us we always ask by what means have they heard about us. We then ask what the broker is looking for and why they have contacted us; it’s usually because they are looking for a good service for their client without difficult lending criteria.
“From the feedback from our brokers, clients choose bridging lenders because of a lack of faith in the banks and because of the lack of access to finance. Clients are becoming more aware that there are other avenues.”
Getting the proportions between new and existing brokers right seems like a delicate balancing act, with each lender looking for slightly different levels. After speaking to various lenders, however, it is clear that the one thing there is always room for in the industry is a new broker who brings a fresh and diverse client base along with them.
Leave a comment