The bridging market has been booming recently. The latest figures from a leading trade body shows a record period for bridging lending in the last quarter of 2021, with completions and applications both reaching an all-time high.
Bridging applications hit £12.7bn in Q4 2021 – an increase of 65% on the previous quarter and the housing shortage has played a significant part in this.
With property supply being so scarce, the ability of investors to develop or refurbish property and sell quickly is crucial.
Whether buyers are looking to prevent a broken property chain or to carry out a quick refurbishment, many are turning to bridging loans for a solution.
Despite the sector being in an incredibly positive place, the conversion rate for bridging enquiries from application to completion across the sector is still lower than it could be.
But there are ways to improve the number of deals that are completed. By working with the right lender that has the flexibility and experience, brokers can ensure more deals make it over the line.
If we compare West One’s conversion rate to the aforementioned trade body’s figures, the statistics show that we are double the bridging sector’s average for successful submission to completion. So why is our conversion rate better? What do we do differently?
I think the first thing to say is that West One is an established specialist lender with our origins in short-term lending and over 17 years’ experience in this market.
In this time, we have built up very good relationships with our partners. Those we work with regularly know us well and know what we require for applications to move through to completion smoothly.
Experienced teams
When assessing the application, we have a strong, experienced team, both internally and externally, who have four decades of experience in the specialist lending marketplace.
They understand the requirements and nuances of short-term lending and who can agree the terms and the structure of the loan quickly and efficiently from the outset.
Couple this with our experienced underwriting and risk teams who have reviewed thousands of applications during their time.
They can efficiently identify and overcome potential blockers within the application and will know if that risk can be mitigated and understand how to overcome an objection.
Flexibility is always important for any bridging lender and we can agree loans outside of criteria if we believe in the transaction and project.
Bridging is not a one-size-fits-all proposition so it’s important to work together with the intermediary and their client to develop solutions and positive customer outcomes.
Communication is key
With all new intermediaries we ensure we work with them so they understand what is required and we take the time to explain and guide brokers through the full process.
We are very aware that intermediaries want the deal they are signing up for without changes being made later on so we are always up front from the start.
We don’t offer speculative terms, and we will always avoid changes to cost or leverage to ensure a smooth transition through to completion. This happens rarely and only if something fundamentally changes the structure of the application during the process.
Finally, we are helped enormously by our technology and last year we had a brand-new underwriting and case management system installed built by our in-house team.
This has enhanced the origination journey with improved data capture, automated document production and underwriting control.
Our aim is to improve our conversion rate even further and I am confident we can do that.
Nick Jones is sales director, bridging at West One Loans
