Can you tell us a bit about yourself and your role at Clever Lending?
I am one of the commercial and bridging specialists at Clever Lending, which means I am one of the first points of contact for introducers to discuss all things “specialist”. This could be anything from a quirky property, to an unusual borrowing structure or lending type across the buy-to-let, commercial and bridging space.
What trends have you seen in Q1 2023 in terms of bridging finance and how does this differ from previous years?
The use of regulated bridging has increased significantly in recent months and more people are starting to use this type of financing to save their property chains. Regulated bridging used to account for about 35% to 40% of the cases I would see, but that is definitely well over 50% now, which shows demand and knowledge of the sector is growing.
On the investment side, we are also seeing an uptick in the number of property investors looking to carry out more heavy refurbishments to try and make their margins work harder in the current economic climate.
What advice would you give to brokers considering bridging finance for their property investors clients and what support does Clever offer brokers familiar with the market and those recommending bridging finance for the first time?
I would definitely advise all brokers considering bridging finance for the first time, or on a regular basis, to use a packager when sourcing a deal. Packagers are specialists in the market and can provide hands on support throughout the entire process. This could be talking a deal through to iron out any wrinkles or conducting a complete analysis of what is needed to ensure all bases are covered.
Everyone at Clever has broad market knowledge and as a bridging and commercial specialist, I have completed many deals over the years, including renovations, commercial to residential conversions and HMOs, so I am well versed in all aspects of the specialist market.
The important thing to remember with bridging finance is that exit is key. In some cases, it can actually be easier to work backwards from the exit strategy to determine the most suitable solution.
You also specialise in commercial finance – what trends are you seeing so far in 2023? Are property investors diversifying into commercial property to gain higher yields and if so, what would you advise brokers to look out for?
The main trend we are seeing is investors adopting a multi-tenant approach to property development, such as more HMOs and large-scale heavy refurbishments such as serviced offices, as they try to increase margins in a tough operating environment.
In cases like this, my advice to brokers would be to definitely seek help from a specialist packager as these are often extremely complex cases requiring different levels of financing and no two developments are ever the same.
Clever Lending contributes to Bridging Trends and the last report showed that both the use of bridging finance for chain break purposes, and regulated bridging overall, is increasing. How should brokers address regulated bridging differently and what key factors should they take into account?
It’s important to think outside the box, particularly in the regulated bridging space as there will always be many clients that do not know about bridging finance and are unlikely to ask directly for this type of financing solution.
Given current market trends, brokers considering regulated bridging should be thinking about alternative exit strategies for their clients, as in some cases, there may be more than one. It’s always good to have a back-up plan, particularly given current market conditions.
Finally, how do you see the bridging and commercial finance markets developing for the rest of 2023? What opportunities, in particular, do you see for brokers and their clients?
There will definitely be more demand for specialist lenders as the year progresses as we are already seeing more cases that appear to be straightforward being declined by mainstream lenders.
When this happens, it is important that brokers do not give up and give us a call. We have been helping clients with specialist finance needs for many years and understand that no two cases are the same. By thinking outside the box and tapping into this expertise, brokers can get the support they need to ensure the right outcome for their client.
