Before we start hypothesising about what 2013 will actually be like for the bridging market let’s look back on 2012 and the highlights as well as the lowlights.
Chelsea’s champions league success and Olympics aside, 2012 was a very successful year for bridging finance. Both media and introducer alike finally “got” bridging finance and embraced it with record levels of business being done if the NACFB and AOBP figures are anything to go by. There were successful Mortgage Expo’s in Manchester and London which had several numbers of bridging lenders there exhibiting, which again showed the strength in depth of the industry.
There were numerous new entrants to the bridging market which showed above all else that investors see the market as a buoyant one, and one that can give a safe and secure return on investment. However it wasn’t all beer and roses though as the industry lost 2 of its biggest players in the shape of Tiuta and Cheval. It’s not for me to go into the why’s and wherefores of their demise, sufficed to say that bridging is like a child…you need to take care over it and watch it like a hawk!
So what does the new year hold in store for bridging finance?
I think it’s a safe bet to say that 2013 will be another growth year for bridging finance. I can only go on Masthaven’s figures of course, but 2012 was a very successful year and our predictions of 2013 indicate that it is due to be another record breaker. There is an awful lot of flannel spoken about how much is actually written by bridging firms within the industry as some people quote from ASTL figures, whilst others quote from AOBP figures. Both have their merits, but neither is an exact replication of what is achieved in our industry, and many years ago I decided to give up “keeping with the Jones’s” and concentrate on doing the best job I could with the tools I have been provided with. 3 separate awards from 3 separate awards ceremonies in 2012 indicates we seem to be doing a half decent job!
There has been speculation that LTV’s will rise and rates will drop this year. I’m not sure whether that is a prediction or whether it is a brokers wish list! I can certainly see tweaks in both of the above, but I am not sure it will be wholesale changes. What I can’t abide, like most brokers, is false advertising of ultra high LTV’s or ultra low rates that aren’t achievable. I am aware that the very odd deal goes through at the advertised values or else the adverts couldn’t go out, but I do get bombarded with calls from introducers asking if they can use us to get the job done as XYZ lender has not come up with the goods.
If 2012 is anything to go by there will be another influx of new money to the arena. This is a good thing as a whole, but must always be looked at with caution from the borrower’s perspective. What track record does the lender have? What regulatory bodies are they signed up to? Have they the collective knowledge to provide you with the best product to fit your requirements? All these questions and more must be asked before you commit to any financial product, certainly one like a bridging loan.
Will more lenders fall by the wayside? Well, if you’re a stats man, then yes, they will. 2 major lenders and one or two smaller lenders shut up shop last year, and in 2011, so the trend is that 2013 will follow suit won’t it? As Masthaven enters its 30th year of lending, myself and the fellow directors think we have seen most things in financial services, but it is always wise to keep an open mind and look at all the different components when it comes to assessing the risk profile of a deal, as this is the bottom line of all lending decisions.
2013 is the Chinese year of the snake which for the bridging industry is really something to sink its teeth into.