View from a 'Bridge'

Let’s be honest shall we, whilst some bridging lenders have been very good at publishing their current lending criteria, rates and LTV’s, which in the main have remained understandably cautious, the majority of the market continue to misguide brokers with inaccurate (frankly false) information. Not only does this serve to waste the brokers time by enquiring on something that is not available it also wastes the lenders time in having to deal with it, so why do it?

Being selective has always been a trait of the specialist bridging industry whether it be lenders accepting cases from certain brokers and not others to only accepting cases that are so vanilla the pod is still hanging sweetly from the vine, nowadays though lenders have become almost impossible to predict. Countless times I have had calls with varying lenders off of the back of their published material or website to discuss enquiries they would ordinarily lend against only to find the following replies being given;

‘We are not taking on any land deals at present’

‘It is not one for us at this time’ (what does this even mean?)

‘We have restricted our lending in this area’

‘We are not looking at deals over XXX ￡’s currently’

‘Our maximum LTV has been lowered’

‘We do not really want anything that is too quirky at the moment’ (again what does this mean?)

Either there must be such an abundance of straight forward vanilla deals out there (that were not prevalent pre-covid) that lenders can pick and choose or lenders are struggling with their credit lines be it getting and maintaining them or with the rules dictated to them for the privilege. Whatever the truth be the current climate regardless of all that we read is far from positive, even brokers sugar coat what they are doing and in some cases how well they are doing it with the reality being very different. What these practices are supposed to achieve is anyone’s guess but what they actually achieve is nothing, save of course for more wasted man hours and a huge misrepresentation of what the market is doing.

What the bridging industry needs is to get back to lending pre-covid as this is not a financial crisis as seen in 2007/8 which was a result of years of irresponsible lending, there is now a far bigger void in our market due to economic uncertainties and bridging lenders now have a chance to play a greater role. What the bridging industry doesn’t need is the continual press noise of another 3rd gen case over the line or we’ve done bridge deal in 5 days or another look at us we’ve lent some money article!!

Caution must of course be shown given the current climate but it should not be an excuse, lenders should not simply use it as a reason to be selective on the deals they like or do not like, if the case fits then lend on it. Now more than ever is the time for lenders who operate in the specialist industry to show why they are there, to look at a deal and as long as it has merit, find a way to structure finance for it rather than turn it away. Straight forward vanilla deals anyone can do it’s called the High St! bridging lending on the other hand is supposed to meet the needs of those that do not fit the High St, and right now it is becoming increasingly hard to distinguish between the two.