Assisted by the Stamp Duty Land Tax rollover from March to June 2021, it is certain that bridging funding will be at unprecedented and record levels in H1, according to Jason Berry, group sales and marketing director of Crystal Specialist Finance.
Berry explained his reasoning behind this statement: “New entrants have flocked to the short-term market attracted by interest rate margin, low loan-to-values (LTVs) or risk and high default fees chargeable when things do not go to plan for the borrower.
“Separately, established lenders have pivoted to now include bridging in their funding toolkits.”
As a result of this, Berry noted that the specialist market is becoming cluttered, which he believes will result in lower pricing for consumers, but that they should watch out for poor practices among some lenders.
Berry said: “There are undoubtedly lenders who are consistently competitive and who crucially provide certainty of decision and their terms very clearly upfront.
“But opportunistic lenders will pitch their pricing low only to change pricing hugely, citing client profile and/or security or valuation as reasons.
“Upfront and exit fees also vary greatly and again it is not uncommon to see opportunistic funders change their fees during processing again citing client/security as reasons.”