You may have seen the recent Bridging Market Study conducted by Interpath in collaboration with the Bridging & Development Lenders Association (BDLA).
The report provides comprehensive insight into trends and prospects based on responses from over 50 market participants, including lenders, brokers and other service providers.
Just over 90% of responses came from lenders and about 6% from brokers. Geographically, the largest proportion of survey participants (57%) were from London and the South East, followed by the Midlands and South West (21%) and the North (19%). 
This study speaks to market optimism
Overall, this study speaks to optimism in the market. Trading volumes have increased over the past year. The industry expects institutional funding to remain available over the next 12 months, as well as continued strong competition and consistent origination costs.
Importantly, credit quality is not expected to change.
Renovations remain the most popular reason for taking out a bridging loan, with 45% of respondents ranking it top of the list. Auction buying and rebridging are also common uses, with 23% and 19% of respondents respectively. When it comes to exit routes, refinancing into a buy-to-let product and selling the property are the most common strategies, cited by 45% and 42% of respondents respectively.
The competitive landscape of the market is underlined by the emphasis on speed of execution, with 36% of respondents identifying this as the most important factor when choosing a bridging lender.
The bridge market is not a niche market. It is a fast-growing field with huge potential for growth and innovation.
Low prices and quality service are also highlighted as important considerations, reflecting the need for lenders to deliver both value and efficiency to remain competitive.
ongoing competition
The outlook for bridging loans remains positive. In a continuing competitive environment, customer needs will continue to be a priority.
Survey respondents said the appetite for trading and owning real estate remains strong, with some optimistic that interest rates will begin to soften in the second half of 2024, further stimulating market activity.
Obtaining the CPSP qualification has several benefits for mortgage advisors
A notable issue highlighted by the survey was the increase in the average number of days delay in closing loans, which was acknowledged by 51% of respondents, which is likely the reason behind the increase in loan terms. It is considered to be one. The majority of respondents (57%) selected 9 to 12 months as their average loan term. However, 32% chose 12 to 15 months, suggesting that the average loan term is increasing over time.
It is clear that bridging financing is becoming increasingly important for brokers. The survey found that 53% of survey respondents said independent brokers were the most important primary channel for originations, while 32% of respondents chose master brokers, making this the second most important channel. did.
expertise
Whether you choose to work directly with bridging or work with specialists in the field, one way to deepen your understanding and demonstrate your expertise to clients and potential clients is to Earn the Specialist Property Finance Certified Practitioner (CPSP) qualification.
Desire to trade and own real estate remains strong, according to survey respondents
Launched last year by BDLA in partnership with the Financial Intermediaries and Brokers Association and the London Institute of Banking and Finance, the CPSP aims to raise industry standards, improve professionalism and enhance the sector's reputation.
Obtaining the CPSP qualification has several benefits for mortgage advisors. We provide in-depth knowledge of the bridge finance market, covering everything from regulatory frameworks to innovative financial solutions.
This expertise enables advisors to provide more comprehensive and informed advice to their clients, increasing their credibility and differentiating them in a competitive market.
A deeper understanding of bridge finance allows advisors to attract a wider range of clients, including real estate investors, developers, and customers seeking short-term financing solutions.
Renovations remain the most popular reason for taking out a bridging loan, with 45% of respondents ranking it top of the list.
The bridge finance market is not a niche market. This is a fast-growing sector with huge potential for growth and innovation.
Mortgage advisors who take advantage of this opportunity with the support of the CPSP qualification will be well-positioned to succeed and make a meaningful impact in the industry.
As the bridge market continues to evolve, staying informed and proactive is key to maximizing the potential of this space.
Vic Janelles is Chief Executive of the Bridge Development Financiers Association.
This article was published in the September 2024 issue of Mortgage Strategy.
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