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Appetite for bridging and development finance will only grow – Sealey

  • 11/11/2021
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Appetite for bridging and development finance will only grow – Sealey
Bridging and development finance markets will be key areas of growth in specialist lending in the near future, says Hope Capital’s chief executive Jonathan Sealey.


Sealey (pictured) said that during the early stages of the pandemic there was a slowdown in the property market. But from the middle of 2020 onwards the bridging industry was resilient “during periods of uncertainty and an exponential increase in property transactions”.

As Covid-19 restrictions eased, Hope saw borrowers begin to look at opportunities to restart their investment plans.

“Unlike many industries which struggled to weather the storm, the bridging lending market did not,” he said.

He added: “As we continue to navigate our way through and out of the pandemic, it will ultimately highlight the lenders who have adapted to the changing needs of their customers and those who have not.

“It is clear the bridging loan landscape has and will continue to change, however, it will be the lenders who learn from this unprecedented time and had the capability to provide bespoke and fast solutions who will be left standing on the other side.”

Looking ahead Sealey said that the bridging market would continue to grow. Reducing rates would come under increased scrutiny adding that lower rates were “only one part of the competitive edge lenders were trying to gain”.

Sealey said that low rates did offer borrowers benefits, as it helped reduce the overall cost of securing funds and helped fund other areas of the process, however, cheaper rates should “never sacrifice product solution or service quality”.

He added: “Ultimately, interest rates will no doubt continue to be a leading factor in the market but the importance of lenders providing flexible products which meet the needs and demands of the borrower, a high-quality service and the reassurance that the deal will be delivered on time will always be paramount.”

The appetite for bridging loans has increased over the past few years as more lenders have entered the marketplace. Hope expects this growth to continue.

“Looking at the industry as a whole, I predict the appetite for bridging loans will only continue to increase. With the number of bridging lenders establishing themselves within the marketplace growing each year, the number of brokers being aware of and considering bridging finance will only continue to grow.

“It is an exciting time for the industry. However, with that in mind we need to make sure we can keep up with the demand by keeping a close eye on the market and investing in the right processes.”

Hope Capital was founded in 2011 and celebrated its 10th anniversary at the end of last month. Since opening its door it has grown to 23 employees.

Operating in England, Wales and Scotland, the lender offers a range of bridging, renovation, refurbishment, discounted loan and development finance products.

Sealey said going forward it plans on growing its loan book by focusing on a long-term recruitment strategy and launching more products.

“Ultimately, we want to continue to be recognised as a specialist lender that brokers can depend on and trust to get the deal done quickly and efficiently,” he said.

He added that the firm plans to expand its proposition in Scotland, a market it entered earlier this year.

“Currently, we provide innovative solutions for residential, mixed-use and commercial property. However, we are now looking to assist brokers and their clients who have refurbishment projects in Scotland by expanding our proposition,” he said.

Development finance crucial for specialist lending market

Sealey said that over the last year development finance had played a “crucial role in the specialist lending market”.

He said that this was due to Brexit and the pandemic as investors and developers looked to keep their projects progressing.

He said: “In the current economic climate, there are many setbacks in the development process due to the demand and cost of building materials increasing and available labour sources decreasing.

“Investors and developers tend to rely on development finance to fund a project, whether that involves covering the cost of the building or renovating a property. However, when the completions do not happen as intended and the deadline to pay back the loan is missed, this has a huge impact on the profitability of a development, if the borrower is not then in a position to meet their existing finance obligations.”

He said that development exit finance provided a “lifeline” because it allowed borrowers to raise capital and finance for the next project upon completion of their current project. The lender launched a finish and exit loan earlier this week in order to target this area.

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