Our short term bridging loans are for purchase, refinance, property improvement or to unlock working capital for business purposes.
This unique overdraft provides you with a flexible drawdown facility giving you instant liquidity and avoids heavy setting-up costs.
Individually structured development loans for residential and commercial projects, with finance available for site purchase, construction and fees, refinance, equity release and to provide working capital. Loans are available up to 90% of the site cost.
We have a commitment to innovation and with the ever changing financial landscape around us we have designed a range of unique Specialist Lending products that solve a range of property lending needs.
By Jonathan Rubins, Director & Chief Commercial Officer at Alternative Bridging Corporation
In an uncertain economic climate, dominated by high inflation, rising rates and an ongoing cost-of-living crisis, the property market has a challenging outlook but not for specialist finance.
In times of challenge specialist mortgage lenders come to the fore, with an appetite to lend and the ability to move swiftly during periods when more established banks retrench from the market.
The Association of Short Term Lenders (ASTL) says that bridging loan books continued to grow in Q2 2023, increasing by more than 5% to an all-time high of just over £7.1bn, at a time when the rest of the mortgage market was suffering a slow-down.
So, what are the challenges facing specialist lenders? And what does the specialist lending industry need for the remainder of 2023?
One of the main challenges for the market at the moment is the ability of borrowers to secure a viable exit to redeem a short-term specialist loan. Interest rate rises have significantly impacted the availability of Buy to Let mortgages and squeezed affordability on Residential mortgages. At the same time, house prices have started to fall, with some economists anticipating a 5% decrease both this year and next.
So, specialist lenders need to work more closely in partnership with brokers to ensure their clients have considered and robustly challenged every possibility to exit a loan right from the outset. If this is given priority at application and an ongoing dialogue is maintained with the client throughout the term of the loan, borrowers will be better placed to achieve an exit without unforeseen delays or costs.
During times of uncertainty, home movers and property investors put their plans on hold, waiting until they can see clearer horizons before plunging into the market again.
However, while the outlook at this stage is largely negative, markets are driven heavily by sentiment. If we can start to see inflation falling significantly towards the end of the year and interest rates settle, the skies will start to clear, buyers will regain confidence and activity will start to pick up again. Inflation is already starting to fall.
Specialist mortgage lenders pride themselves on delivering a hands-on, responsive service. However, it’s also prudent that they maintain a robust approach to risk management to ensure they can grow their lending in a responsible and sustainable way.
So, lenders need to strike a balance between managing risk and service. There has been a lot of talk about the disruptive role of AI technology in the specialist lending industry, but this threatens to be a red herring for any lender that puts too much store in the opportunity that AI can provide. It can certainly be a facilitator, enabling greater efficiency and scalability, but in specialist mortgage lending, the only service is personal service.
Those lenders that ignore this will be left behind, and likewise those lenders that ignore technology will be left behind. The specialist lending industry needs lenders to take a balanced view, adhering to their core principles of service, whilst being open minded to the new ways that technology can complement human interaction to make the process smoother and more efficient.
Overall, the main thing the specialist mortgage lending sector needs is optimism. These may be challenging times, but they are also times of opportunity and, as the economic outlook starts to improve, specialist lenders can look forward to a very bright future.
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