January is a good time to think about your pipeline for the next few months. Did you go into Christmas with one eye on your work pipeline for January so you are all lined up and ready to go, or have you come back to work foot to the floor to find new business?
We start the new year with optimism for a bounce in demand from both investors and house buyers. Whatever your political persuasion, having a majority government has got to help stabilise the UK and enable people to start planning for their futures.
Throughout 2019 competition got increasingly fierce as more and more lenders fought over the same small pool of borrowers and brokers. This has been good for brokers in terms of finding excellent rates and product options for their clients.
It has also been good at providing more choice in other ways, while everybody likes low rates a good bridging lender is also about service. Arguably competition that improves service levels, specialism, transparency and turnaround times is more important to enable brokers to choose lenders who they can trust will provide a superior service.
With the election out of the way, the hope is that more investors will now enter the market. Many of these will require bridging funding which will increase the size of the market and increase borrowing demand. The reduction in rates may also help to broaden the market, making bridging a more affordable option for those who may not otherwise have considered it.
There is still a mis-conception of who exactly a bridging loan is suitable for, while it is traditionally associated with auctions, developers or borrowers buying their next house before selling their last one, increasingly landlords are a key user of bridging loans, using them to adapt or convert a building before letting it out. Business owners also, are using bridging finance to help them to fund that next deal or capitalise on an opportunity. Anything that helps to grow awareness of bridging as an important and affordable source of funding has to be a good thing.
Any post-election upsurge in demand is still realistically likely to take a good three months however. And, of course, we still have to wait to see if we do indeed leave the EU on January 31st and exactly what that will look like. The uncertainty of Brexit will clearly have an impact for some time yet, as any trade deal is likely to take at least until the end of the year to sort out.
In the meantime however, there is hope of an uplift in demand. For those who have not yet filled their new business funnel quite as full as they would like to, a more stable political environment along with some of the lowest bridging rates ever seen and improving service has got to help.