Too many bridging lenders competing for business will result in some failing, Dave Jones, joint managing director of lender Reward Finance Group warned today.
He was speaking on a specialist property finance panel at the Mortgage Business Expo at the Royal Armouries in Leeds.
Jones said: “A lot of lenders will want to be involved in the next few years – in my opinion that will result in the demise of lots of bridging lenders. There will be less of a choice of lenders.”
Adam Tyler, executive chairman of trade body FIBA, who was chairing the panel, said: “I still see new lenders every single week. In 2019 I’m still seeing new lenders coming into the market.”
Tyler added that he’s seeing examples of customers asking whether they should borrow from particular lenders.
Nicola Firth, chief executive of Knowledge Bank, said the phrase ‘I’ve never heard of them’ is enough to put some people off from dealing with a particular lender.
Broker Michael Primrose, managing director of The Property Finance Guy, said he chooses bridging lenders based on their reputation and track record, while he prefers lenders that are institutionally funded.
Primrose said: “It’s difficult from a broker’s perspective to know, especially with the new lenders, where’s best to place business.”
However D’mitri Zaprzala, head of sales at Octopus Property, was upbeat about the state of bridging and specialist lending.
He said: “There’s huge demand for alternative specialist finance and there’s not enough of a supply of lenders. That might change, the balance might switch the other way.
“But a lot of specialist lenders aren’t just doing bridging – there’s a plethora of types of transactions they do.”