It’s no secret the bridging industry is booming; the West One Bridging Index showed a 35% increase in the value of bridging loans written in the year ending April 2015, and with the Conservative election win extinguishing fears of a mansion and non- domicile tax, it seems likely that bridging loans will continue to grow in line with the demand for buy-to-let property.
Bridging has long been regarded as a specialist finance option, but we are seeing more and more mainstream lenders entering the market to take advantage of high demand. The tables have now turned, and as the bigger names attempt to reclaim their share of the specialist markets, intermediaries are facing increased competition from lenders who deal directly with customers. Therefore it’s more important than ever for finance professionals to future-proof their business and really demonstrate the value they add to their clients. For brokers, this isn’t just a case of sourcing more lenders or increasing your product offering; businesses need to focus on internal investment in order to prepare for significant changes in the market.
Creating tomorrow’s brokers
Some people regard commercial finance as an ageing industry, (perhaps not the bridging sector specifically) but the same needn’t be said for the industry of tomorrow. At Vantage Finance we’ve seen first-hand the value of recruiting fresh talent, and some of our most successful underwriters joined us at entry-level. A dose of young blood can be valuable to any business, and in rapidly expanding markets, such as bridging finance, a bit of innovative thinking can go a long way. There’s no doubt that recruiting inexperienced young professionals is a long-term investment, requiring time and commitment, but the benefits can be momentous. Home-grown employees develop alongside your business, and it’s often these people who are most prepared to help contribute to taking the company in a new direction when winds change.
Personally, I find great reward in cultivating young people, and I think it’s crucial that we give entry-level candidates the opportunity to build a career in our profession. Industry leaders are already setting an example, with programmes such as the NACFB and Hitachi apprenticeship scheme for prospective asset finance brokers, and whilst business is good, now is the time for other finance sectors to follow suit and invest in the future.
In my last Bridgingwatch blog I talked about the importance of new regulation for the sustainability of the industry as a whole, but I think there’s also something to be said for the benefits of regulation on a micro scale. Regulatory change can often be seen as a hindrance to brokers, but for those who don’t make an effort to fully understand the upcoming changes, it may come back to bite them. We are currently in the midst of a period of rapid change for the bridging industry, and businesses are being tested more than ever on their responsibility and robustness. The more significant changes, such as the Mortgage Credit Directive and the Consumer Credit Act, are a step towards changing the way the industry operates for good. In my eyes these new regulations are a positive move forward, but businesses need to embrace, rather than just accept them. Regulation exists for a reason – to protect the customer and to truly satisfy the regulator, businesses need to ensure that the customer is really is at the heart of all they do, rather than treating compliance as a tick-box exercise.
There are a number of qualifications available for those new to the industry and interested in upskilling, but it is equally important for well-established brokers to continue professional development throughout their careers. The FCA expects firms to have training and educational programmes in place for advisers of all levels, and this is something brokers should take full advantage of.
The important factor with industry qualifications is determining their value to your business. Some courses aren’t for everyone, and the brokers who benefit most from additional qualifications will have chosen courses that are directly relevant to their everyday practices and products. However you do it, what really matters is that you find ways to constantly develop and progress yourself, as well as those around you. Some may find additional qualifications frivolous, but they may provide your business with that extra bit of expertise that sets you apart from the competition.
Bridging finance continues to prove rewarding for brokers across the sector, but as with any market, question marks remain over its future in the ever changing financial services industry. The market is now well established, and I believe it will continue to grow, albeit at a slower rate. Brokers must prepare for this inevitable deceleration, along with the prospect of increased competition from mainstream lenders. Nevertheless, there will always be a necessity for professional financial advice, in some shape of form, and brokers will need to diversify and adapt in order to stay in contention.
Whilst the market looks bright for the foreseeable future, now is the time for businesses to invest for the long-term and put in place the necessary safeguards that will see us through the good, and more importantly, the bad times.
By Lucy Hodge, Director, Vantage Finance