Ideally I think we would all like some certainty and a lot more stability than we are seeing from the political classes at present, but unfortunately that looks like being in short supply in the short-term, and therefore we have to make the best of the current situation.
From a bridging sector perspective, it seems we have a rather polarised approach to the post-referendum fallout with a definitive split between the ‘business as usual’ brigade and those that have decided to rein their activities in for fear of what the future might bring. This is the case for both clients and lenders and the ‘Brexit whirlwind’ has certainly whipped up a number of issues for brokers and distributors as we try to understand how sector players are going to ‘play the game’ in the weeks ahead.
Certainly, we are aware that a number of lenders – thankfully not most on our panel – have decided to lessen both their risk and lending appetite in the wake of the Vote to Leave. Those using those lenders are having deals which, pre-Referendum, appeared to be acceptable turned down as lenders, for example, reduce their LTVs meaning the deal is not going to make it across their threshold. Frustrating for both the adviser and the client who would have anticipated the lender honouring their commitment but criteria changes mean this isn’t possible.
Now, of course, every lender is different and will be beholden to a different set of circumstances not least who funds their deals and their appetite for risk in this ‘new world’. However, one can’t help but feel that the fundamentals of the sector remain sound and therefore we might question why there has been the need for these potentially ‘kneejerk’ reactions.
Late-notice decisions to decline the deal are not likely to do those lenders any favours when it comes to future business with either the adviser or the client, and they perhaps show up the true commitment to the bridging sector these lenders do (or rather don’t) have. As mentioned above, we’re currently not in such a position, because our panel is working on a ‘business as usual’ strategy and, while nothing is guaranteed and this may change in the future, it’s incredibly important that we are able to offer this level of confidence to our referring advisers and their clients.
What we, in the bridging sector, need to provide at the moment is stability and certainty; to be able to say to our clients that not only might we be able to get you a better deal but the lender genuinely wants your business and an acceptance now means you will not be going back to square one at some point in the future.
There is a lot of talk about the confidence issues in the wider UK economy, but also financial services and at our level, in the lending arena. We believe that both lenders and businesses like ourselves can do a great deal to engender greater levels of confidence and by doing so, we will be able to maintain (and hopefully) grow business levels across the rest of the year.
