July 2019
by James Bloom, Managing Director of Short Term Lending at Masthaven
The right tools, products and services are essential in today’s ever-changing short-term finance market
Many brokers are expecting the recent robust growth in short-term finance to continue unabated, but specialist lenders could hamper its potential if they fail to innovate effectively.
Our latest Broker Beat research showed that the view of the broader specialist lending market was optimistic. Short-term finance, or bridging, was identified as a top-three growth area, but if it is to fulfil its promise, lenders in this space must ensure a full suite of tools, products and services are available to cater for the expected demand.
Breaking the norm
Bridging loans conventionally provide additional finance for a client to buy a new property whilst the sale of another is still being completed. But the make-up of the bridging market is changing rapidly, and lenders must be versatile in offering products to meet new customer demands.
According to consultancy EY, 27% of bridging loans are now for refurbishments, compared to a quarter (25%) for mortgage delays[1]. That is precisely why Masthaven has decided to increase the amount it would offer as a refurbishment loan to a maximum of £2 million, improving both its Prime and Standard offerings.
The tech and human touch
With more than £4 billion of bridging loans written last year, an increase of 15% from 2017[2], bridging companies need to be confident they have the capability to deal with an increase in demand.
Our Broker Beat research showed that more than four in 10 (41%) intermediaries felt that clients prioritised low rates when taking out a loan, but many also named flexible criteria (30%) and speed (12%) as key considerations. This means that specialist lenders need to have robust technology platforms in place to enable brokers to quickly and easily identify the available products that might be suitable for each of their clients.
That being said, at Masthaven we recognise people don’t fit into pre-determined silos. This is why we have developed products that can be personalised and tailored to a client’s requirements by our active underwriters.
This human touch is essential for specialist lenders to thrive. Having a suite of flexible products is one thing, but without a proactive business development team communicating what your firm can offer to brokers, its potential is limited.
The reality is that specialist lending intermediaries are currently in a buoyant mood, with 89% saying they feel confident about their own company’s prospects in the next year, according to our Broker Beat research. So it’s up to the lending sector to make sure we don’t let them down.
For more information visit https://www.masthaven.co.uk/