Bridging lender: Changes must be made in order to survive

Bridging lender: Changes must be made in order to survive


The short term finance sector has always picked up on major market trends before others in the industry, according to Ryneveld van der Horst, the finance director of This makes the lender well placed to see that while recovery is some way off, cautious hope that the worst is over remains.

“We saw property prices starting to decline, sales taking much longer to complete and funds drying up in the mortgage market much earlier than when it was reported in the press,” Mr van der Horst confirms, “and recently, we've also started to see that properties are selling again – at prices not so far below the asking price.

“Although we’re not quite at the bottom of the market just yet, we have seen the rate of decline slow down lately and we are starting to see more sensible deals come through. The housing market is not going to bounce back to its previous levels in a year, but we will see long term growth.” 

However, the deep rooted problems in the banking sector should not be overlooked just yet. “The banks are still in massive trouble,” Mr van der Horst states. “The debt levels in this country are enormous; in the commercial property sector alone there are loans worth billions and billions of pounds up for refinance this year and there's simply not enough money out there.”

Faced with all this financial upheaval, Mr van der Horst admits that brokers aren’t the only ones who will have to adapt to stay in the industry. “Bridging loan companies will have to look at their business models and adjust to face the new order, as the old lending rules no longer apply. As for brokers, we’ve been preaching diversification forever and using bridging finance is a key way to supplement an intermediary's income stream.”

Bridging finance has long been labelled a niche product and put to one side by many introducers, however Mr van der Horst is keen to address the misrepresentation, saying: “Bridging finance is a specialised product and there are instances where a bridging loan won’t be right for you or your client - just like there are instances where equity release, or a tracker mortgage, won’t be right for you. However, there are certain circumstances where a bridging loan is the perfect solution for your problems and we've helped numerous professional property investors and developers who could not have done what they have without the use of bridging finance.”   


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