Bridging Watch: The rise of the bridging lender


Masthaven is proof that, with the right proposition, ambition and personnel, there are no barriers to reaching the top

I would like to start this article by drawing your attention to an event I believe demonstrates the positivity that drives the bridging market: namely, the news last month that Masthaven Finance has been granted its retail banking licence.

From the perspective of the bridging market, it is a particularly noteworthy event to see one of “our own” make the step to banking status. I think this success is at least partly owing to the strength of our market and the innovative and entrepreneurial spirit it embodies.

Leading the way
Masthaven Finance has been one of the most successful bridging lenders since the credit crunch and has done much to champion short-term finance and its uses to the intermediary market.

Having moved into second charge lending in the past few years, it announced itself as an important multiple channel lender.

I am in no doubt the path being trodden by Masthaven will act as an example to others to show there is no barrier to aiming for the top table if you have the right proposition, conditions, ambition and personnel.

While we are on the subject of lenders, it has been encouraging to see two of the newer ones enjoying a great start to the year.

Mint Bridging has reported an 820 per cent increase in its loan book compared to Q1 2015, while Roma Finance is claiming a 300 per cent increase over the same period.

We do not know from which point they were coming, so it is difficult to know precisely what it means in terms of both volume and numbers. However, other lenders in the sector are also talking about increases in new business volumes.

It has to be acknowledged that, as we adapt to a post-Mortgage Credit Directive world, the bridging market looks to be in fine shape. Indeed, now with a well-established lender base and the fact bridging and its uses are so much better understood, the future is bright. It is also worth thinking about how much further the sector’s reputation will be enhanced as more bridging on the consumer side becomes regulated.

We have always argued that regulation had three distinct goals. The most talked about is the improvement of customer care and protection, and there is no doubt that is the part on which people concentrate. Alongside that, the second goal is the improvement of the level of professionalism for both advisers and lenders.

Lastly, and a part that tends to be ignored, is the way in which regulation has managed to shine a light into some of the darker corners of the bridging industry. Slowly but surely it has ensured those very small lenders that kept away from the limelight and whose terms and conditions were opaque at best and anti-consumer at worst have, in the main, withdrawn from the market.

Celebrate regulation
So when anyone complains about regulation and asks “what did it ever do for us?” we can say that customers are better protected, the industry has become more professional and the bottom feeders that populated the lower reaches of the bridging market have crawled back under their stones.

Yes, we have to contend with more paperwork and it is important our trade bodies continue the great work they have been doing to ensure the red tape does not overcome the validity of customer protection so as to become unworkable.

But I am confident that common sense and the willingness of regulator and regulated to act in the best interests of the customer will prevail, while also ensuring the industry has the room to continue to innovate and thrive.

Phil Jay is a director of Complete FS