The benefit for brokers
The complex market remains a challenging landscape for both lenders and brokers alike. However, many agree there are still significant benefits in tapping into this sector.
Reputation is vital and promoting a USP of being able to consider and place complicated deals can be advantageous in a crowded sector.
The case for vanilla lending
Low-risk, straight forward deals remain desirable to high street lenders who are less comfortable with taking on risk – but waiting for the perfect borrower and conditions will leave many lenders out in the cold.
An increase in price competition and shrinking margins have caused a lot of bridging lenders to turn their attention to the non-vanilla sector. Here transaction risks are assessed at a more detailed level and hence priced accordingly.
As banks become more risk adverse and regulation is tightened, more complex loans will be seen in the bridging sector.
High street lenders refusing to look at complicated titles, ownership structures and unconventional assets mean many borrowers are now looking to the bridging sector for a solution.
For these reasons, many lenders believe that the bridging sector and number of complex loans will continue to grow rapidly from here on.
Author: Sarah Jackson