By James Bloom, Divisional Director at Alternative Bridging Corporation
The property market has demonstrated its resilience in recent weeks with demand from buyers driving a very healthy amount of activity. In fact, just two weeks since the market reopened in England, Rightmove recorded its busiest ever day on 27th May, with visits to the site surpassing six million for the first time. Both estate agents and surveyors have confirmed that this interest is translating to transactions.
It would, however, be unwise to assume that this marks the beginning of a clear path to recovery. With the furlough scheme still in place, we have not yet experienced the full impact of job losses as a result of economic slowdown, and it will not be until later in the year when we can expect to have a clearer idea of the outlook.
There is still much uncertainty ahead, and so it is more important than ever for brokers to make the most of every opportunity they are presented.
So, what steps can you take to ensure that you are best placed to make the most of each enquiry and lay the strongest foundations upon which to build the future of your business?
Here are our tips to growing your bridging business in an uncertain environment.
1. Identify the opportunities
If you are looking to grow your bridging business, it’s important to focus your marketing efforts on areas of growth. The upheaval of recent months mean that many people, in many different circumstances, have needed to change their plans and may need a funding solution that enables them to do this.
This will drive demand for development exit loans and the refinancing of existing funding arrangements. In the residential space, where term lenders are frequently changing criteria and pulling products, homebuyers are increasingly looking to chain break bridging to help save transactions that would otherwise fall through.
Similarly, in recent weeks there have been examples of residential, buy to let and commercial deals in the market that might have previously been financed by term deals, but have fallen outside of restricted criteria. Bridging can provide a funding solution on these cases, particularly where a quick completion is needed.
For most businesses, cash flow has taken a significant hit as a result of COVID-19 and the lockdown, and fast, flexible business lending will be important to help many get onto the front foot.
An uncertain property market also presents opportunities for investors to enquire and improve assets, ready to sell when confidence returns, so light refurbishment loans are likely to prove popular.
If your clients fall into any of these categories, you should be starting a conversation with them about their plans for the coming months.
2. Proper presentation
Many lenders, like Alternative Bridging, have a strong appetite to lend. However, with uncertainty hanging over the economy, it is only right that they take a prudent approach to underwriting cases and understanding exit strategies.
So, to help ensure that you achieve the best possible conversion rates, think about the presentation of cases you submit to a lender. Does the case stack up? So, for example, is the exit strategy realistic? If the client is an investor or developer, do they have experience in their particular field. If you can communicate a clear rationale about the case, you can help lenders in their decision-making process.
3. Choose your partners carefully
In an uncertain environment you need to provide your clients with as much clarity and certainty as possible, and the best way of doing this is by choosing your partners carefully. Actions speak louder than words, so think about which lenders have supported you and your clients in recent months.
Whereas some lenders, like Alternative Bridging, have been able to harness their expertise and experience to maintain a commitment to the market throughout the lockdown, others have been less consistent. As we move into the next stage of recovery, having the confidence that the lender you partner with will be consistent and committed, will be an important step in providing your clients with the best service and putting your business in the strongest position.
Click here to read the article on Financial Reporter.