Association celebrates second anniversary with 60% growth

Association celebrates second anniversary with 60% growth




On the day that the UK was officially told it was out of the double-dip recession and the FSA's MMR rules were published, the Association of Bridging Professionals (AOBP) held its second Annual General Meeting (AGM) at Altitude 360° at the Millbank Tower, London.

Despite the rain and mass of fog descending onto London last Thursday morning, a strong crowd of 80 members ascended to the 29th floor of the Millbank Tower to attend the AGM and celebrate the Association’s second birthday.

 

Self-proclaimed to be the only industry Association which truly represents bridging finance as a whole, the AOBP has attained great traction. Its unique inclusion of different areas of the market is defined by the Association’s membership tiers, each of which has seen a substantial increase in numbers.  With 20 lenders, 24 Affiliate lenders, 550 brokers and 20 specialist distributors, the AOBP is a force, similar to that of a network, to be reckoned with.

 

The new membership figures represent a 60 per cent increase across the board in the past 12 months, with eight new lenders and 200 new broker members.

 

There was ample time before the presentations kicked off to not only enjoy the foggy view and have breakfast, but also to make some good contacts and swap business cards.

 

The day kicked off with AOBP Chairman Jonathan Newman, Senior Partner at Brightstone Law, welcoming everyone. He emphasised the Association’s mission statement, the role of the AOBP as a forum for the exchange of ideas and initiatives and highlighted a few key areas in which the AOBP has made great strides over the last 12 months, including the recent National Roadshow to promote the trade body’s works outside the M25.

 

Jonathan Samuels, CEO of Dragonfly, kicked off the presentations and emphasised the areas that, from a lender’s perspective, brokers need to think about when dealing with a bridging loan. 

 

Jonathan asked brokers to think about how a deal would look through the eyes of their underwriters. Brokers need to ask the following fundamental questions: What type of property and where? What’s the borrower like? How big is the loan being applied for, and why? What’s the term of the loan? Is there a plausible exit?

 

Jonathan emphasised that transparency is key and that, as a lender, the key things they need for an offer are: a completed and signed application form, a valuation, and KYC (Photo ID for each applicant and two utility bills).

 

He also highlighted the state of the economy, the recent failure of Government schemes to kick-start the market – touching on how the New Buy Scheme has only built 250 homes to date from the initial target of 100,000 - and the importance of looking to the future. 

 

Russell Martin, Finance 4 Business MD and new AOBP Executive Committee member, summarised the results of the AOBP Roadshow and current market trends which they, as a business, are seeing.

 

The survey results from the AOBP Roadshow showed that:

 

 

24 per cent of brokers consider the cost of bridging finance to be the main obstacle when placing deals;

 

 

Also relating to challenges faced during application, 20 per cent of brokers cited both a dearth of choice when it came to lenders and their own lack of adequate bridging knowledge;

 

 

Almost half of those who responded said that they felt a lack of lending outside of London was a real issue;

 

 

32 per cent of attendees stated that a more open-minded approach to credits with an advert credit history is needed;

 

 

On their product ‘wish lists’, a 21 per cent majority of brokers would like to see higher LTVs, while 14 per cent wanted longer terms to enter the market;

 

 

40 per cent of brokers felt that they could triple their business as a result of attending the Roadshow;

 

 

The majority of brokers wanted assistance from the AOBP when it comes to marketing themselves and their bridging offering to clients.

 

 

From Finance 4 Business’ own statistics, although commercial mortgage completions are increasing by value and numbers, they are being diluted as a percentage of its overall business in 2012. Bridging has increased exponentially in enquiries, completions and income – with 40 per cent of the business’ overall business deriving from bridging products. Conversion levels are relatively high.

 

Development finance has increased by 50 per cent but figures are still relatively low in regards to percentage of overall business.

On the morning that the FSA’s new rules about the MMR came out, Ray Cohen, compliance expert and MD of Jackson Cohen, gave a great summary to the AOBP members. For example, all sales made on an interactive basis, including phone calls, will have to be deemed as advised sales. (To read all the details, please 

click here)

 

Stewart Barnes, Director of Associate Lender Portman Finance, described the evolution of bridging over recent years. It was very interesting to hear how lenders have adapted and become flexible since the years of ‘The World of Recession’ without succumbing to a Darwinian ‘survival of the fittest’ scenario. Some lenders had to exit the market, others only survived by stopping new business and a plethora of new lenders have entered the market in recent years. There are fewer stigmas attached to bridging now and it is further respected as a viable financial solution. Stewart sees bridging as short term secured finance, and claims that “the storm has come to pass over the last five years”.

 

Rob Pendleton, Head of Professional Services at AOBP Affiliate Levene Chartered Surveyors, spoke about the role of the valuer in bridging deals, and what brokers should expect from them.

 

For comparable and investment-based valuations, an experienced valuer should get it right. If he does not, Rob continued, it is generally due to laziness, a lack of care or a lack of experience. It was interesting to note that “Courts have said that

values are not wrong if they are between 10-15 per cent off the mark”; B&C will be looking into this revelation further...

 

For development valuations, a ten per cent change in gross development value can lead to a difference of 50 per cent or more in value for loan security purposes.

 

All of the presenters were very engaging, and the data and the perspective of the marketplace was very strong. 

After the talks, guests tracked down the presenters to find out more about bridging and the market, and dates were locked down in diaries.

 

It was fascinating to hear what brokers think about bridging, what lenders want in deals and applications, how brokers and lenders alike will be affected by the MMR rules, what the packagers are doing, and, most importantly, what the Association is doing for its members.

 

Summarising the day, Jonathan Newman, Chairman of the AOBP, said: “Feedback from the morning was very positive. It was very exciting to publish figures showing a 60 per cent growth in membership in what was, after all, only the second AGM.

 

“With the publication of the game–changing MMR on the very morning of the event, the atmosphere was lively. What better endorsement of the AOBP could there be? Ray Cohen was able to deliver an immediate response and bullet point guide through the Review. Members then had an opportunity to interact with their peers, gauging how each other felt the industry and their businesses would respond.”

 

It must be considered a successful event in terms of turn-out, quality of presentation, venue and atmosphere. The event was ideal for networking, meeting new faces from the industry and getting the answers that people have always wanted answered. It personified the strong voice it is lobbying with for the bridging finance industry.

 

The Association is quickly gaining a reputation as a well-organised professional body and the last 12 months have seen it go from strength to strength. We can’t wait to see what the AOBP will achieve over the next 12 months.

 

 

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