In 2016 there was an increase in the number of bridging lenders. This has led to competition that has reduced loan rates. To survive in what could soon be a saturated market, bridging lenders need to innovate to survive.
Borrowers have benefited from the high level of competition amongst bridging loan lenders; this has reduced profit margins of lenders. To counteract this requires innovations and increased efficiency. Lenders are looking at how technology and artificial intelligence systems can be used to make the lending process quicker and more efficient.
Borrowers are not necessarily persuaded by the cheapest loan. Customer service from both brokers and lenders can be valued over price. D’mitri Zaprzala, of Octopus Property said that finance organisations need to have competitively-priced innovative products that solve customer problems. He said:
“If you understand the market you’re in and the different finance solutions borrowers are looking for, you should always get a degree of traction and be able to carve out a niche.
“But price, in this day and age, isn’t everything.
“The modern specialist lender has to do everything well, not just some things well and others OK.”
Many lenders are diversifying and extending their range of bridging lending products . Zaprzala urges lenders to be cautious especially if they have no experience and skill in a new sector. Some lenders are doing the opposite, specialising in particular niche areas. They are experts in different regions of the UK or a particular type of property.