The Intermediary – October 2026 - Flipbook - Page 49
Q&A
don’t go to plan, the borrower can’t exit and
must rely on a second or even third bridge
to get out of the loan. All this does is kick
the can down the road, and it ultimately
damages the reputation of the
unregulated bridging industry.
What we’d like to see is lenders
sticking to the criteria they’re
comfortable with, assessing the exit
properly from day one, and being willing
to say ‘no’ early.
Are exits becoming more difficult?
easily knocked off course, good borrowers may
shy away, and that affects brokers too.
What changes are there in
funding scenarios?
JONATHAN
SEALEY
Across the book, the common thread is
borrowers taking longer to exit and being
more careful going in. The biggest shift
we’ve seen is towards refurbishment, with
more borrowers using bridging to improve
properties and increase their value rather than
simply buying and holding. Alongside that,
landlords are increasingly moving into semicommercial and commercial assets to diversify
their portfolios beyond purely residential.
Investors are still active, but they’re
working harder for their returns. Rather
than relying on capital growth, they’re
adding value themselves and spreading
their risk.
I wouldn’t say so. We know what gets stuck on the
book. We know that sales have slowed down,
build costs are sometimes running higher
than expected and properties are being
down-valued more often. We also know
why these things are happening, and
which asset types and areas are most
likely to see issues with the exit.
The onus is on the lender to start the
conversation about the exit much earlier,
What gap does your new
at the outset, so the borrower and broker
Max GDV product fill?
have everything they need to exit within
the original term, which keeps the scheme as
Term finance turnaround times are slowing,
financially attractive to the borrower as possible.
KATE COWAN and the cost of materials is constantly
Not much has changed for us in terms of
rising. Refurbishment and maintenance
diligence. We still rely on full valuations for larger
costs are very high, and changes such as the
single properties or where our exposure is high,
removal of Stamp Duty relief have increased
and we use desktop valuations, AVMs and title
costs further. For landlords, these costs are
insurance as part of our core offering where we
becoming unmanageable.
believe the proposed exit and figures are viable.
We are seeing smaller landlords moving on
Where it does shape our approach is at the
assets, while landlords and borrowers with larger
outset. Our process looks at every eventuality,
portfolios are jumping on these opportunities.
from a slower sale or a lower valuation to a
For these borrowers, momentum is so important
delayed refinance, and makes sure the deal is
to sustain growth, so allowing them to have the
commercially viable for both us and the borrower.
funds to contribute to an onward project is vital.
We know that most landlords are asset rich
What impact are external factors
and cash poor, so we wanted to give borrowers
additional cash so they can move quickly on their
like delays having on bridging?
next project.
Every single loan is now at risk of delay at HM
We require a full schedule of works and a full
Land Registry, and it’s the borrower who bears the
valuation, and we rely on our trusted third-parties.
brunt. On longer-term loans, a slow registration
The valuation covers the current value, so that it is
isn’t an issue given the years that follow. Bridging
as accurate as possible, and the schedule of works
is different. With redemptions within 12 months,
and cost breakdown ensure we know the project
a slow registration process can affect a borrower’s
will reach the estimated GDV.
ability to exit. As a lender, until our charge is
We already have a team and process in place
registered, we are also at risk. A requisition can’t
behind the scenes that work well with borrowers,
always be dealt with the same day by the solicitor,
guiding them to a successful completion. We also
so even a borrower who does everything correctly
require borrowers to have a cash injection from
can be caught out if their timing is off.
the outset, so they are as invested as we are.
The wider concern is confidence. If bridging is
The market is difficult at the moment, but we
seen as a difficult, time-consuming process that’s
are giving borrowers the tools to succeed. ●
October 2026 | The Intermediary
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