"Lenders with bank funding lines will be unable to issue terms at LTVs and rates that they have become accustomed to."
We spoke to Ronak Ruparell, CEO and co-founder of Bridge Invest, about how to manage clients’ expectations in the face of the changing lending environment and how a softening housing market can provide opportunities for brokers.
CR: Tell us a bit about Bridge Invest’s proposition and what it can offer to brokers and borrowers.
Bridge Invest is a principal lender providing short-term finance to property investors and businesses. We offer facilities suited to each borrower’s unique needs, secured against property or land in England and Wales.
Regardless of whether someone is an experienced, or first-time bridging borrower, everyone needs the peace of mind that they can quickly access the funds required and that those funds can be drawn down when needed.
At Bridge Invest, we understand the borrower’s pain. With our unique background in investment banking and property development, we offer bespoke financing solutions by working closely with our clients to find a solution that is right for them. Furthermore, as a boutique lender, we can offer flexibility larger institutions simply cannot.
Time and time again, the feedback we receive from brokers is that their biggest frustration is the lender’s inability to provide a fast decision and more importantly, not knowing that the lender will deliver on their promises. At Bridge Invest, there is no red tape, just fast and flexible funding that borrowers can count on. We provide terms on the day we receive an enquiry. We typically issue indicative terms within two hours, a Decision in Principle within 24 hours and a drawdown in 10 business days, if not sooner.
The line of communication between the broker and our underwriting, sales and credit teams remains strong throughout the loan cycle. Borrowers and brokers get direct access to the decision-makers, seven days a week to ensure a seamless execution of the loan. Once terms have been sent and agreed, borrowers have the comfort of our guarantee to always stick to our promises. The feedback we’ve received from brokers on our reliability when it comes to our commitment to deliver, has been overwhelmingly positive and often is one of the key reasons Bridge Invest is chosen over our competitors.
CR: What are Bridge Invest’s main aims or focuses in 2019? Do you have any exciting news or plans you can tell us about?
We believe that high quality service is one of the key differentiators in the market. Delivering high quality service, as opposed to simply increasing product risk parameters, is likely to be a key driver for supporting our growth and the building of our market presence through 2019.
At Bridge Invest, we continue to invest in our infrastructure having signed up with a software house to build a bespoke Loan Management System, which will not only improve our efficiency internally, but will allow us to provide even faster responses to enquiries and improve the borrower/broker experience throughout the loan cycle - from enquiry, completion to redemption.
CR: What trends do you expect to see within the bridging market in 2019?
Despite Brexit, political uncertainty and headwinds facing the buy-to-let market (i.e. changes to stamp duty, mortgage interest tax relief and the tightening of BTL mortgage underwriting rules), the bridging market proved to be relatively resilient in 2018.
Q1 2019 saw the market contract with some borrowers choosing to wait until after the March Withdrawal deadline for clarity. With the deadline having been extended to October, lenders are seeing good lending opportunities with businesses and property investors not prepared to wait any longer.
With property prices falling in some regions, particularly in London, lenders will have to tread carefully by adjusting their underwriting and risk management metrics. The softening property market will also see a rise in rebridging, as borrowers struggle to exit their loans via sale, or where they are hampered by higher than predicted LTVs, putting their long-term finance exit at risk. Lenders therefore must be prepared for an increase in repossessions.
CR: What are the biggest issues facing advisers in the current economic environment and what should they be aware of when dealing with clients?
The biggest issue brokers are finding and one they will continue to encounter, is that lenders with bank funding lines will be unable to issue terms at LTVs and rates that they have become accustomed to. This is inevitable as the property market continues to soften in the run up to Brexit in October and will likely continue in the months after.
Brokers will have to adeptly manage clients’ expectations in the face of the changing lending environment.
On a positive note, this will benefit principal lenders who can provide certainty to brokers and borrowers.
CR: If you could see one headline about financial services in 2019, what would it be?
'Despite macroeconomic uncertainty, Brexit and political uncertainty, the fundamental need for housing counterbalances these headwinds'.