Survey by specialist bridging lender Hope Capital has showed that 97% of brokers say that they are happy to work with unregulated lenders.
For more than half of the brokers who answered the survey, bridging already makes up at least 20% of their business, with one in 16 saying more than 80% of their business is bridging.
This level is set to increase, with 90% of brokers saying they think the level of bridging business they do will rise over the next year.
Delays in bridging loan completions
The part of the process that causes the most delays in the completion of a bridging loan is the speed of the client’s solicitor, with almost a third citing this as an issue. This was followed by collating information from the client, which is seen as the main cause of delays for 36% of brokers.
Getting approval from lenders is an issue for one in five, as is, slightly worryingly, the brokers’ own understanding of the bridging process with 20% saying they have a lack of understanding or knowledge of the market as a whole.
Around 52% think flexibility on LTVs should be a priority, while almost half say they would like lenders to consider lowering interest rates and improve the speed of service. Four in ten said acceptance criteria needs to be addressed.
Jonathan Sealey, CEO of Hope Capital, said: “The call for lower rates is likely to be a neverending one however. Rates, including our own, have dropped substantially in the past few months and bridging loans are up to 3% cheaper than they were a few years ago, but while it’s natural that brokers always want them to be lower still, bridging rates will never be the same as mainstream as every loan is underwritten manually.”
He said: “Brokers are now turning to bridging lenders for a wide variety of reasons, often because the High Street is not offering the solutions they need or they are hoping for a more tailored service. At Hope, we have seen the level of lending increase significantly over the past year and, like the survey suggests, expect to see it continue to increase into 2018.”