View more on these topics

Comment: Bridging unfazed by Brexit vote

sealey-jonathan

Many bridging lenders have their own funding, unaffected by either the EU referendum or the Bank of England.

According to many commentators, the Bank of England lowered interest rates too soon.

A lot of big decisions being made at the moment are happening in anticipation of what may happen next, not because the business or economic environment has changed at all. But Prime Minister Theresa May has stated that Article 50 will be invoked by the end of March, at which point we should know, at last, what we are working with regarding Brexit.

When it comes to the bridging world, demand has continued to climb and shows little sign of slowing down. Data for Q2 from the Association of Short Term Lenders showed loan applications increased by a huge 63 per cent. Many of the completions should be seen this quarter when the figures come out at the end of the month.

Bridging can often be counter-cyclical, with volumes increasing as traditional funding dries up. In recent years, however, the bridging market has risen alongside the mainstream one. Very little funding for bridging loans comes from the money markets, so the base rate cut has not affected the majority of rates; these are influenced more by competition in the market.

And increased competition is already emerging. Indeed, there is a diverse range of lenders in the bridging market, many with their own funding not affected by either the EU referendum or the Bank of England’s actions.

While demand for short-term funding remains strong, the industry is still incredibly healthy, providing solutions for developers, refurbishers and businesses, as well as the more traditional bridge between the sale and purchase of residential property.

Jonathan Sealey is chief executive of Hope Capital

Recommended

FCA logo glass 620x430

Lenders to review systems to comply with FCA arrears guidance

Mortgage firms are expected to review their policies and systems to ensure that they comply with the findings of the FCA’s guidance on mortgage arrears remediation announced earlier today. FCA director of supervision, retail and authorisation Jonathan Davidson said that in the future the authority would look to “ensure all systems are reviewed when considering […]

Legal-and-General-Duncombe-in-2013.jpg

Opinion: Remortgages can avoid fixed-rate roulette

The Bank of England’s decision to lower the base rate to just 0.25 per cent means we are once again in uncharted waters. Of course, the expectation for many is that this rate cut will bring with it a reduction in mortgage rates. However, recent research by Legal & General has shown that fixed rates […]

Real-Estate-Agent-House-For-Sale-London-700.jpg

Property sales fall by 11.3% year-on-year in September

The number of residential property sales dropped by 11.3 per cent in September compared to a year earlier and by 4.3 per cent since August. The provisional figures from HM Revenue & Customs show that there were 93,130 transactions in September 2016 There was a large increase in transactions for March 2016 followed by a […]

Newsletter

News and expert analysis straight to your inbox

Sign up