Jason Berry

Specialist bridging finance offers shelter from the storm

Jason Berry

group sales director, Crystal Specialist Finance

Reaching for the newspaper or turning on the 6 o’clock news can be an uncomfortable experience right now.

From the cost-of-living and energy crises to ongoing supply-chain issues to the pandemic, our short-term economic forecast is looking increasingly bleak.

In an attempt to dampen soaring inflation, the Bank of England (BoE) raised interest rates to 1.75 per cent (the highest level since January 2009) last week. This week, the MPC has predicted that the UK is now projected to enter recession from the fourth quarter of this year, with the BoE suggesting that inflation will be around 13 per cent in a few months’ time (although, it seems, falling next year).

Any change to base rate will have a ripple effect on the housing market, but as the majority of homeowners are currently on a fixed rate (with two million on variable-rate deals), it will be some time before the real impact of rising mortgage costs hits the wider market.

Remortgagers and first-time buyers will, of course, see an immediate rise in their mortgage costs when sourcing a deal. Unfortunately, both first-time buyers and home movers are also faced with house prices that have risen on average by 11.8 per cent over the last 12 months, according to Halifax’s latest house-price report.

Despite our current economic woes, the same report showed that house prices fell by only 0.1 per cent month on month. The consensus is that we are going to see a more general slowdown in housing market growth due to an improved balance in supply and demand, as demand tails off when the cost-of-living crisis bites harder.

Tremors have been felt in the lending market, too. Recently, a US funder that backed 12+ UK lenders pulled out of the bridging marketplace with immediate effect, while other financiers have chosen to batten down the hatches by temporarily exiting the market.

With this perfect storm of economic volatility, rising interest rates, product availability, and diminishing shelf life, mortgage brokers and property buyers alike now need stability, flexibility, and speedy transaction times more than ever. Enter the bridging finance specialists.

THERE’S ROOM UNDER OUR UMBRELLA

This is where specialist brokers can really offer shelter from the current storm and find your clients a speedy and cost-effective solution.

Specialists like Crystal Specialist Finance work with a wide and varied panel of the UK’s best bridging lenders, meaning that we have a broad picture of the current lending landscape and can source the best products available at any time.

Given the current financial challenges many buyers are facing, specialist lenders continue to innovate by bringing new and bespoke products to the market, which is contributing to the growing popularity of this shortterm lending solution.

The strength of the relationship (and trust) between lender and distributor allows a specialist to represent the unique merits of even the most complex of cases to reach your desired outcome, fighting your corner to iron out any potential creases in a deal.

In the current market, brokers are increasingly needing an additional driving force to keep completions on a timely track. This is where the skill of specialist underwriters comes to the fore, as they can steer an application through the potential minefield of lender criteria, being both deft and meticulous in avoiding pitfalls in a way that a generalist broker may not.

There may be nothing but grey clouds on the economic horizon, but that doesn’t mean your property deal is dead in the water, as the powerful combination of specialist bridging lender and distributor is here to help you weather any coming storm.