Cautious bridging approach ‘stopping good deals from being done’ ‒ Anderson

That’s the argument of Matthew Anderson, commercial director at Bath and West, who said there had been some “unintended consequences” from the increased professionalism that the bridging market has seen in recent years.

Anderson argued that the bridging market was “far more restrictive” than it used to be, with deals overlooked not because they don’t represent a good level of risk but because they “lie outside the often strict constraints placed on money by third party lenders”.

He added: “Bridging is by nature very different from long-term mortgage lending. The borrower’s status is not in contention in the short-term sector in the same way it is in residential lending. In bridging, security is everything. Yet the appearance of institutional funding has moved even experienced underwriters away from this approach.”

Anderson emphasised he was not calling for lax lending standards, noting the collapse of some newer entrants to the market who took “inappropriate risks”.

“But there is scope for experienced lenders to revisit the basics of bridging, allowing them to use their judgement rather than a set of predetermined rules set by a funder in another country,” he concluded.