A poll of B&C readers saw almost 70% claim that more mainstream lenders will enter the bridging market.

A spokesperson for RBS told B&C that it was continuing to monitor the market and Jonathan Sealey, CEO of Hope Capital, felt that as the bridging market becomes more mainstream, it would attract more established lenders who want to see higher returns, compared to the drop in returns for mainstream lending due to heightened competition.

“The growing realisation that bridging is a reputable and respectable part of the lending market also makes it more attractive to more mainstream lenders looking to diversify.

“The bridging industry has been expanding in both size and reputation for a number of years now, so it stands to reason that more mainstream lenders will want to enter this market.

“I can also see mainstream lenders looking to acquire established bridging lenders to quickly gain traction in the market.”

Benson Hersch, Chief Executive of the Association of Short Term Lenders, felt that the so-called lending sector was becoming more mainstream.

“It’s more likely that major mainstream lenders would prefer to fund lenders on a wholesale basis, as they are not geared to provide the level of service required for individual borrowers.  

“With interest rates predicted to remain low, banks will need to seek new markets to boost returns. Once balance sheets improve, they may be more amenable to investment.”

Keith Aldridge, Managing Director at Amicus Property Finance, felt traditional lenders may be considering opportunities in the short-term lending sector, but that did not mean they would enter it.

“You need to have considerable in-house expertise and many will realise that in the past this essential requirement of your proposition has been lacking.

“I welcome the new entrants, as competition is, of course, healthy, but I suspect many will decide in the short term it is not for them and leave it to the seasoned experts, that is not to say that the big boys will not be working hard on preparing a short-term lending proposition designed to address the risks, recruit the quality, experienced personnel and bring their undoubted clout to the market.”

Paul Wertheim, Operations Director at Mint Bridging, felt that although there was money to be made from bridging, he questioned whether traditional lenders were interested in entering the market.

“The mainstream banks will not be able to work quickly on development loans, or on anything that is slightly out of the remit of normal lending. 

“I can’t see how this will change. 

“Bridging companies who have their own funding lines, like Mint, make their own decisions and are not accountable to corporations.

“Banks have shareholders, credit committees and legalities that all have to be taken into account when funding a loan. Their timescales for the foreseeable future will still be too long.”

Ashley Ilsen, Head of Lending at Regentsmead, added that it was probably not worth the traditional lenders’ time competing in a relatively small marketplace.

“If you compare the size of the mainstream mortgage market to the size of the industry for bridging, it pales in significance and may not be worth their while competing.

“The market for bridging is currently oversaturated and despite a large lender benefiting from economies of scale and a low cost of funding, this doesn’t necessarily justify entering the market.”

Narinder Khattoare, Sales & Marketing Director at Kufflink Bridging, agreed adding: “I feel that we are approaching saturation point on the supply side.

“For mainstream lenders to become seriously involved they would have to be offering better rates/criteria then the established players and, as I said, margins are already slimmer than ever due to existing competition.”

Scott Marshall, Director at Roma Finance, said there was a number of reasons why high street banks had yet to really provide the levels of service specialist bridging lenders did.

“Traditionally banks have been like a big ocean liner – slow to turn round, and incapable of delivering funds as quickly as we do. 

"The banks have eyed the bridging sector and may want to join in as they have seen what a growing market it is, but I think there are too many barriers for them to set up a bridging division and it’s not something they can do quickly.

However, Scott concluded by adding that, like Jonathan, he could see some acquisitions.

“I think there may be some acquisitions of specialist lenders by banks, as they need to buy in the experience, property expertise and the network of solicitors and valuers that bridging lenders already have set up.

“They would also run these as separate subsidiaries to keep the short-term loans off their own balance sheets to minimise their capital liability."