February 2018
By Jack Coombs, director at Aspen Bridging
Amid the uncertainty of 2018 in the property market, regarding both Brexit and the recent rise in interest rates, moving outside one’s comfort zone is not an easy thing to contemplate.
Why try new products or lenders? Why expend funds on advertising and stimulating new business? Why not sit tight on the existing clients and relationships?
Unfortunately, in any industry, sitting still is unlikely to be a sensible option (unless of course you are running a monopolistic utilities company in Latin America).
Within the lending community, there is a strong sense of the need to evolve.
For those without banking licences or equity funds, there are clear signs that formerly reliable funding lines are under threat.
For those with little technological expertise, there is the danger of being outflanked by the type of API technology which has recently revolutionised other finance sectors in the UK, such as non-prime auto, and which is starting to enter short-term property lending, too.
For banks, the possibility of increases in the required level of lower-risk assets on the balance sheets is ever present, and the ever growing level of regulatory requirements means that speed, so sought after by some customers, is less and less a priority.
On the other hand, there are lenders in the market offering consistency and reliability.
There are increasingly innovative short-term products filling former gaps in smaller development projects, as well as bespoke semi-commercial and commercial offerings, the ability to lend on value over purchase and other such niches, which are more and more affordable and accessible.
There is a focus among some lenders on developing technology to speed up the process to pay out, and make checks with the same rigour less and less painful for brokers and clients.
2018 is a year of change. For brokers looking to get the most out of what is on offer, all that is needed is the willingness to try everything that is new, as well as taking the best on offer from existing practices and partnerships.
It does require courage to put something to a client or a customer which you, as a firm or an individual, have not previously used. In an uncertain environment, every lead needs to be utilised.
However, staying within the comfort zone will never lead to improvement. Do the research and understand what is real and what is not of course – but remain open to new opportunities.
If, once tested, something is found wanting, it should be discarded without hesitation. On the other hand, new products, technology and partners are – more than ever – needed in a dynamic and changing environment and you may just find an extra piece in the jigsaw of your client offering that you were missing.