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Bridging

Brokers expect to write more bridging business this year – Glenhawk

Samantha Downes
Written By:
Posted:
March 10, 2022
Updated:
March 10, 2022

The UK bridging sector is in rude health, and confidence is high for 2022, according to a survey of brokers.

 

Glenhawk said 84 per cent of brokers it surveyed expected to write more bridging business this year than in 2021.

The lender said the findings reflect the defensive appeal of real estate as an asset class, as just 14 per cent of brokers wrote less bridging business in 2021 than 2020.

The lender said last year’s Permitted Development changes had yet to translate into increased borrower demand and that complicated borrowing processes remained a significant obstacle for new borrowers and brokers

Glenhawk also found that 74 per cent of brokers believed Permitted Development would enable them to arrange more bridging cases. It added borrowers had been slow to embrace the 2021 changes to Permitted Development because of a lack of understanding in the opportunity it presented.

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The survey, carried out from a series of webinars hosted for brokers by Glenhawk in February 2022, also found that half of respondents claimed a lack of suitable properties was the main obstacle for this lack of demand.

There was significant capacity amongst brokers for more business, 14 per cent said they had turned away more bridging cases in the last 12 months, compared with 57 per cent who said they could place more.

How interest was calculated was seen as the most confusing area by over half those surveyed, followed by the legal process, cited by 39 per cent and the application process, which was cited by 32 per cent.

The survey also found lenders were continuing to exercise caution, with 60 per cent of brokers citing the placement of higher loan to value cases as their biggest challenge.

Nick Hilton (pictured), managing director at Glenhawk said: “Building on what was a remarkably robust 2021, buoyed by changing consumer behaviour, supportive government stimulus and a low interest rate environment, expectations are high for 2022. These findings align with the exceptionally high levels of enquiries we have generated so far this year, with the market opportunity as Covid-19 fades into the distance set to grow considerably this year.

“At the same time, there remain challenges, noticeably the continued need for lenders to simplify and increase transparency for the borrower process, whilst more highly leveraged schemes will remain out of favour, especially if recent global events take on a more urgent focus. Furthermore, despite the welcome changes to Permitted Development last year and optimism about its potential, huge swathes of the market remain unaware of the opportunity, so there is a signficant education piece to be undertaken in the coming months.”