The bridging sector is experiencing a period of sustained, unprecedented growth, reinforcing its role as a key component of the property finance landscape.
According to the latest lending data from the BDLA, bridging loan books rose by more than 14% to a record high of £10.3bn in the fourth quarter (Q4) of 2024. During this period, completions reached a record £2.3bn and applications hit £11.3bn.
Many of those applications will convert to completions in Q1 2025, but not all. In fact, it’s been a characteristic of the bridging market that, typically, only just over a third of applications go on to convert to completion.
Fostering a more efficient market will benefit everyone
This discrepancy often stems from the nature of the market, where brokers approach multiple lenders simultaneously to gauge interest and secure the best terms. Although this approach makes sense in a fast-moving industry, it inevitably leads to a high drop-off rate as many applications are never followed to completion.
Lenders understand this as an inherent aspect of the bridging finance sector, yet it creates inefficiency. Underwriting teams frequently find themselves working on applications that will never progress, leading to unnecessary workloads and, at times, frustration.
Accuracy of details
Improving efficiency across the market is an achievable goal, and brokers play a crucial role in helping lenders to work more effectively. One way to do this is by ensuring that the information submitted in an initial enquiry is as accurate and comprehensive as possible.
Our engagement with the FCA tells us that the regulator is increasingly looking across the provision of all loans
By delivering a detailed enquiry at the outset, including any additional considerations as well as the specifics of the case, brokers can reduce the number of follow-up questions required and help lenders to reach a decision faster.
This approach not only speeds up the application process but also increases the likelihood of securing the right terms for a client.
So, what steps can brokers take to help lenders work more efficiently?
Even at enquiry stage, it’s important to include as much accurate detail as possible, about the client, the security and the ownership structure. This is true for any type of mortgage enquiry, of course. The main point of difference in bridging is details of a well-defined exit strategy.
Lenders place considerable emphasis on exit strategies, so ensuring this aspect is clear and viable is essential for increasing the chances of approval. It may even be advantageous to propose more than one exit strategy, with different options depending on the likelihood of alternative scenarios.
This is an evolving situation but it provides a good reminder about the importance of a strong trade body
If, for example, a client’s primary exit strategy is the sale of a property, what are their options should the sale fail to complete in time to redeem the bridging loan? Do they have a plan to refinance should a sale not be achievable?
Transparent communication
Maintaining transparent and proactive communication with both clients and lenders throughout the process is fundamental to better outcomes. If there are potential challenges or complexities, addressing them at the outset allows lenders to provide tailored solutions rather than encounter unexpected issues later.
The growth of bridging finance presents significant opportunities for brokers, lenders and borrowers. It can also create challenges, so fostering a more efficient and collaborative market will benefit everyone.
Improving efficiency across the market is an achievable goal
By improving the accuracy of enquiries and submissions, brokers can reduce unnecessary workloads for lenders, leading to a more streamlined, effective and client-focused industry.
At the BDLA, we are committed to supporting initiatives that encourage best practice and facilitate open discussions between brokers and lenders.
Open discussion
Another area where we are engaged in open discussion is with policymakers and regulators. Although many lenders in our space operate entirely in non-regulated lending, our engagement with the Financial Conduct Authority tells us that the regulator is increasingly looking across the provision of all loans.
One recent example is in the disclosure of commission paid to intermediaries, following a Court of Appeal judgment that ruled against a car-finance lender on the non-disclosure of commission paid to an introducer.
Underwriting teams frequently find themselves working on applications that will never progress
The pertinent point from this judgment was that it was based on legal legislation, not regulatory, so there could potentially be a read-across to all lenders in our sector, both regulated and non-regulated.
This is an evolving situation but it provides a good reminder about the importance of a strong trade body. At the BDLA, our membership is as strong as ever. This membership amplifies our voice both in our dialogue with the regulator and in promotion of the sector.
Vic Jannels is chief executive of the Bridging & Development Lenders Association
This article featured in the April 2025 edition of Mortgage Strategy.
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