Transparency is good for business
Jonathan Sealey is chief executive of Hope Capital
The bridging market which bounced back after the shock Brexit vote continues to show its resilience, with gross annual bridging lending in the UK increasing to £4.2bn in April earlier this year. However, as our industry continues to grow and develop, so must its brokers and lenders that operate in it.
We believe that transparency is absolutely essential in building trust between us and our clients. We pride ourselves on being open with clients throughout the entire process, from loan terms through to the associated costs for each bridging loan.
The discussion around fees and bridging loans continues to rear its head. However, on the one hand, it could be that there’s no upfront fee but the interest rate is slightly higher, or the borrower may pay a fee but then benefit from a lower interest rate. On the other hand, some borrowers may require a quicker turnaround time and may therefore be prepared to have a more expensive loan. This is where our speed of response really comes into its own, and being a true principal lender means we look at each bridging application on its own merits. In contrast, others borrowers may find it difficult to get a loan on an unusual property, so may pay more for a lender who can assist them.
However, amid much change in the bridging and indeed the wider mortgage market, one thing is, and will always be, absolutely essential. Any fee or payment must be clear and declared at the outset, so that the borrower knows exactly how much it will cost, both upfront and over the course of the bridging loan. This includes all fees and interest charges. The borrower then has all the information at their disposal in order to make an informed decision on whether to proceed with the loan.
We continually look for key partners and intermediaries to build long standing relationships with, so we recognise and understand the value of your relationship with your client. Therefore, as the bridging loan market continues to grow and develop, the industry must remember that a relationship-based approach has and will always resonate well in specialist lending when it is founded on truth, transparency and facts.