October 2018
By Mark Posniak, Managing Director, Octane Capital
Unless you’ve just returned from a 3-year phone-free jaunt in the Australian outback, you’ll likely be bored stiff with Brexit by now. Our departure from the EU has been the defining narrative in the news since the nation voted to leave the bloc in June 2016.
Now I’m not sure anyone can genuinely claim to understand what has become a deeply convoluted, if not frankly unfathomable, negotiations process, including (terrifyingly) those at the very heart of it, but to all intents and purposes we are set to leave the EU at 11am on 29 March next year.
Some doom-mongers are predicting the gravest of self-inflicted economic disasters for the UK, as we cast ourselves adrift from the European bloc, while others expect B-Day to mark a new beginning as Britain rediscovers its buccaneering identity and goes global all over again.
I’m personally not one to speculate as to what the future holds but the reality rarely turns out to be either as good or as bad as people predict. In my experience, extremes very rarely materialise. What actually goes on to happen tends to be a bit of a damp squib, or to fall somewhere in between.
Whether you’re a die-hard Remainer or point-blank Brexiteer, I think that what readers of Advantage will agree is that the biggest political event for decades is unlikely to have a disproportionately negative impact on the bridging industry per se.
In fact, it could even be positive. The reason for this is that bridging finance is fundamentally ‘market neutral’ and can thrive in any macro-economic environment, whether strong, middling or weak. This is good news for future clients seeking to make use of it and for everyone else working in the sector, both lenders and brokers alike.
Back in 2009 and 2010, for example, in the immediate aftermath of the Global Financial Crisis, it quickly became clear that times of radical economic uncertainty are a fertile ground for financially strong professional investors who are alive to the many opportunities that are thrown up when things get messy.
And bridging, at a time when many term lenders were ultra-cautious or even slower than usual to turn things around, was their tool of choice. I’m not exaggerating when I say demand for it rocketed.
The bridging sector, in other words, has been shown to positively thrive when there is blood on the streets. So even a chaotic and volatile Brexit, wreaking havoc with the property market as a whole, will not necessarily spell bad news for those that work in the industry. This is even likely to prove true in the capital, whose streets could be the bloodiest of all.