We are living in turbulent times and although I am still optimistic that we can avoid a credit crunch style event, there are still likely to be winners and losers, among both lenders and brokers.
As I write this, speculation is rife about what the Bank of England’s MPC next move will be, whilst the Government has leaked news of a cut in Stamp Duty which will be very welcome by the industry, but with the other issues bearing down on the economy, not least the rising cost of living, it is anyone’s guess whether it will stimulate the market positively, aside from increasing house prices–again!
In the bridging sector, it is highly likely that we shall see a surge of new enquiries, particularly if longer-term funding is disrupted.
One of the features of the credit crunch and its aftermath was that when mainstream lenders withdrew from the market creating a vacuum, it was successfully filled, in part, by short-term finance in both the residential and commercial sectors.
Of course, the bridging market is many times larger than it was then and will not be immune to the dangers of funders pulling out if the economy deteriorates.
Brokers will need to be sure that their preferred lenders will not just be relying on one funding source.
That said, the bridging market, which proved to be so vital in the last downturn, will again be a valuable resource of short-term support for developers as well as its more traditional market among residential and commercial property buyers
Damien Druce​ is commercial director at Black and White Bridging
