Tiger Financial look back over the year analysing the impact of Brexit
With buy to let tax changes and the Brexit vote, it’s been an eventful year for the bridging loan sector. Despite these shocks and the potential threats to the success of the industry, the bridging loan sector is booming
Brokers have seen strong demand for short term finance throughout 2016. This is likely due to the array of bridging options available to clients now with flexible acceptance criteria and encouraging rates.
Despite the predictions of some industry experts, the Brexit vote didn’t seem to impact the success of bridging loans as initially feared. In fact, some bridging loan brokers actually reported an increase in broker enquiries of as much as 40% following the EU referendum.
Numbers from the Bridging Trends Index indicate that 30% of bridging loans were taken out as a result of mortgage delays. This means that mortgage delays are still the primary reason that borrowers are taking out bridging loans, which is unchanged from the previous year.
Property buyers are likely to be turning to bridge loans even more to secure the property they’re after as we approach the actual exiting of the EU. As the date gets closer and the finer details of how it will affect specific market sectors are announced; banks, bridging loan brokers, and other lenders will need to become more stringent with their lending criteria. This delays the process of purchasing the property even further and will result in another successful year for bridging finance.
A recent study was carried out with 2000 consumers that discovered that almost a 1/3 of the survey group when asked, thought that obtaining bridge finance post-Brexit would be more difficult. If this is to be the case, it is up to the lenders and brokers to work together to highlight the products that are available, and the myriad of uses for bridging loans, in order to sustain activity in the sector.
Mintel, a global market research and market insight company, announced that they expect a strong 2017 for bridging finance. In their 2016 bridging loans report, they stated that:-
“Bridging has provided a vital resource to those looking to secure immediate finance. The industry’s substantial growth over the last seven years suggests that the scope for innovation and collaboration between lenders and brokers will expand alongside an awareness of how bridging finance can be useful in a range of scenarios, which will only increase growth potential.”
All of us here at Tiger Financial welcomes the news and look forward to the next strong year. For more information, or to apply for a bridging loan, contact us.
This article was written by Matthew Dailly, Managing Director of Tiger Financial.
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