View more on these topics

Bridgingwatch: Who tops the league?

Football is not the only arena where people like to speculate on who the biggest players are and who could break their stranglehold 


When describing the teams that dominate English football, the phrase ‘the Big Four’ is often used to refer to the clubs occupying the top four positions in the Premier League and – if they manage to stay there until May – a coveted place in Europe’s Champions League.

Last season’s incumbents were Manchester City, Liverpool, Chelsea and Arsenal, meaning no seat at Europe’s top table for the might of Manchester United or other previous qualifiers, such as Tottenham or Everton. Southampton and West Ham have offered credible threats to the established order at various points this season but ultimately lacked the legs to stay the distance.

It is not just in football and other sports that experts and observers like to speculate on who the biggest players are and who may be able to break their stranglehold. The Big Four is also a commonly used term in finance, especially in the professional services world where Deloitte, PwC, Ernst & Young and KPMG call the shots. Of course, these big hitters used to be part of the Big Eight, until various mergers and scandals – not least the spectacular collapse of Enron – halved the line-up.      

This brings me to the bridging market, where I am sure I am not alone in speculating who our own Big Four are and who the challengers to the throne could be. I will not be so indiscreet as to start naming names but I think it is fair to say that the market leaders of four or five years ago are now being seriously challenged by other experienced and established lenders that are threatening to upset the status quo with new funding sources and better distribution models. 

This threat has come not just as a result of the challenger lenders upping their games but also because the previous pioneers have become complacent over their core business and taken their eye off the bridging ball by over-diversifying their offerings. 

Another area where lenders need to guard against placing all their eggs in one basket is in going solely after the larger-loan market at the expense of a wider, more granular spread of loans. The big-ticket deals are pleasing when they come off but it is just as important to have a steady stream of more modest transactions to boost the loan book.

Some of the emerging lenders have been able to bring the fight to the usual suspects through the use of the peer-to-peer funding model. As savings rates plummeted over the past few years, investors turned to the crowd to seek a better return and enterprising bridging lenders were alive to this new funding stream for satisfying demand from borrowers. 

It is perhaps too early in the development of P2P finance to know whether it is a viable, long-term market that is here to stay – and not just a needs-must solution to current conditions. But it is certainly a case of making hay while the sun shines as it continues to support equity values. P2P is definitely a buzzword in specialist lending circles at present but we need to ensure it does not become a less favourable b-word – a bubble.

As with sport, there are no guarantees that success in the past or present equates to continued accomplishments in future and firms must adapt to evolving markets to achieve long-term results. You have only to look at Liverpool’s dominance of English football’s top division throughout the 1970s and 1980s – followed by no league title for 25 years – to realise this. Conversely, inspiration and hope for some of the bridging market’s smaller players come in the shape of Manchester City, which has gone from languishing in the third tier of English football in the 1990s to landing two Premier League titles this decade.

West One Loans’ latest index shows that almost £50m of bridging finance is being arranged every week so there is plenty of demand from developers, businesses and individuals for short-term finance. But only those that are wholly committed to the market will thrive as the year unfolds.



House prices grow again in March

House prices rose 0.4 per cent in March, offsetting a 0.4 per cent drop the month before. According to Halifax, the average house price was £192,970 last month, meaning quarterly year-on-year prices were up 8.1 per cent. This continued a steady decline from 8.5 per cent in January and is significantly below the peak of […]


Leeds launches 10-year fix at 3.64%

Leeds Building Society has launched a new 10-year fixed rate at 3.64 per cent. The product is available to 80 per cent LTV and has a £999 fee. Borrowers can pay back up to 10 per cent of the loan each year without penalty. Otherwise, early repayment charges are set at 6 per cent in […]


CML launches buy-to-let statement of practice

The Council of Mortgage Lenders has published a statement of best practice for non-regulated buy-to-let business to ensure lending is “responsible and clearly understood”. The trade body says 31 of its members have signed up to the principles, comprising 90 per cent of the market, and that any other member operating in buy-to-let will be […]

‘How to…audit your auto-enrolment scheme compliance’

Avoid pension penalties with our auto-enrolment checklist

According to the Pensions Regulator’s annual commentary and analysis report released this month, 785 potential non-compliance cases were referred for investigation, with 23 auto-enrolment compliance notices issued. And they predict that the use of their statutory powers is only going to increase.


News and expert analysis straight to your inbox

Sign up