FEATURE
WHAT’S AHEAD
Why bridging could come into its own now Despite the UK’s financial worries, industry professionals say the bridging market has reason to be optimistic, writes Simon Meadows
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n economic downturn, though challenging, could provide new opportunities for the bridging market, lenders suggest. For many, rising inflation and interest rates are cause for considerable concern, but some bridging lenders believe there could be a silver lining to a recessionary period. It’s anticipated that they will pick up business from borrowers struggling to secure funding in the general mortgage market. In spite of the recent economic turbulence, Phodis Maratheftis, Alternative Bridging Corporation’s recently appointed head of sales for London and the South East, remains pragmatic. “Now we’re in a time when the base rate’s increasing and we’re probably going to hit a period when property values are going to decline a little bit before they get any better,” said Maratheftis. “So your traditional mainstream lenders are likely going to be more conservative on things like obscure properties or more unusual transactions. That’s where bridging can take the next step forward to cover that market. “I think the commercial lenders out there are also going to be a bit more conservative. More and more people
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now, I think, who are going to struggle to maybe get a long-term commercial mortgage might start looking at bridging [and] find out that it is actually a lot more useful than they probably think, especially for people who might want to buy or refinance their commercial assets.” He said, “Someone who doesn’t know a lot about bridging, all they see is a slightly higher rate than regular mortgage
“With us, even though we’re a short-term lender, we’re always looking farther than that – a year or two years ahead – because you have to be optimistic in the finance industry” – PHODIS MARATHEFTIS lenders; however, it is a totally different entity, [for when] you need a more tailormade solution rather than your standard mortgage. I think with more traditional long-term lenders, it is a lot of box-ticking, whereas bridging is more of a commercial
BRIDGING INTRODUCER NOVEMBER 2022
mindset and decision-making. And if it makes sense, let’s do it. It’s definitely a more flexible industry. “Bridging nowadays, it’s very wellknown and I would say probably more respected because it offers various solutions. It has always been popular with those who know it well and there’s always room to do more business.” Maratheftis remains focused on delivering innovative, tailor-made property-lending solutions as he contemplates how best to navigate a downturn. “Looking at it from a lender’s perspective, it’s going to be about sensible loans-to-value on the right facilities,” he explained. “So not over-lending in areas where you probably shouldn’t. It’s about being conservative when you need to be and more ambitious when you need to be as well. We actually have a three-tofive-year term facility, which will be quite popular, I think, because of the mainstream market possibly being more conservative.” Does Maratheftis think, though, that some property investors could be deterred, even in the short term, while they wait for the market to settle? “Possibly,” he agreed. “But there’s also the www.sfintroducer.com
