Charles Haresnape: Bridging is no one-trick pony

The bridging industry has seen incredible growth over the past few years, given it used to be a much less visible sector of the lending market. In fact, the bridging market grew by 26 per cent in 2014, with the total size of the sector reaching £2.42 billion. Even more astonishing when you realise that the bridging industry has tripled in size over the past four years.

While the rate of growth is calming somewhat as the market matures (bridging grew by 73 per cent in 2012), a greater awareness of the industry and the options it provides introduce some new and exciting challenges for the years ahead.

While high street banks have continued to show a reluctance to lend on new developments, bridging has provided an invaluable resource to those looking to secure crucial finance.

The industry’s huge growth shows that as people become aware of the other reasons why bridging finance might be the perfect fit in a range of scenarios, the scope for innovation and collaboration between lenders and brokers is growing, and with it the range of products on offer.

The fact that both, the volume of loans as well as the value of those loans is growing show that the bridging sector is not a one-trick pony.

As the bridging sector continues to build on its successes, now is the perfect opportunity for lenders to adapt their processes to a changing marketplace in order to provide customers with the best possible deals.

Aldermore entered the bridging market in June last year and we have been looking for ways to widen distribution and provide support to brokers. Since September, we have been working on developing and building a new bespoke IT system for bridging which we have now launched.

The new system takes into account all of our operations and processes, right from an initial enquiry through to issuing head of terms. The new system will ensure better delivery and turnaround times for our bridging customers, which can be essential in situations like auctions where financing needs to be secured as quickly as possible. Furthermore, when customers are ready to exit their bridge loan, our bridge to term offering enables them to switch to a residential or commercial product for long term funding.

Since we launched our bridging proposition, we have had plans to develop our products and proposition further and this new system gives us a strong base to build from, as well as the flexibility to put those plans into action more easily. As the bridging market develops further, we feel it is important that as lenders, we take every opportunity to improve every aspect of the process in order to keep the industry moving forward.

As the election approaches, and the supply of housing continues to be a headline issue, the ability for bridging to provide relief through the reclamation of empty properties will only become more relevant, and the sector is likely to have another extremely buoyant year.

By Charles Haresnape, Managing Director, Mortgages and Commercial Lending, Aldermore