Demand and activity levels across the bridging finance sector continue to rise in line with its perception and profile across the wider mortgage market and in the eyes of a growing number of property professionals and borrowers.
This is reflected in the inaugural Interpath and Bridging & Development Lenders Association’s (BDLA’s) Bridging Market Survey which highlighted that 62% of bridging industry figures expect annual origination volumes in the market to grow. A mere 8% said they expected annual origination volumes to fall and 30% said that there would be no significant change.
Interesting, when it came to distribution, 53% of these respondents said that independent brokers were the most important primary channel for originations. This was followed by 32% pointing to master brokers.
As a master broker, or packager, or specialist distributor – however you like to badge this up – with getting on for 25 years operating in the bridging finance space, we fully appreciate how important the intermediary channel is for lenders and borrowers.
For the purpose of this piece, I’m going to stick with packager as this is a term which is more relevant than ever in a time when short-term lenders who may have opened their doors to a wider array of applications are suffering from elongated completion times, backlogs and lower completion rates. And much of this could be down to being faced with a catalogue of cases where incorrect or insufficient information or detail is being included, or not, as the case may be. Essentially, meaning that all too many cases are not being packaged to a high enough standard.
So let’s take a brief look at why packagers remain so important in what is a multifaceted property market, increasingly complex economic time and amidst some tougher lending constraints.
So what does a good, trusted packaging partner look like?
A proficient packager provides an in-depth understanding of specialist markets, access to favourable rates and products, dedicated case managers, and in-house underwriters. They should collaborate closely with introducers to maintain clear boundaries regarding client ownership. For instance, client contact during or after the case is only made if explicitly instructed by the introducer.
Packagers possess deep knowledge of what various specialist lenders require and how to present complex borrowing scenarios effectively. They serve as a comprehensive sourcing system, understanding individual lending criteria to ensure even the most intricate cases find suitable solutions. Properly packaged cases see higher acceptance rates, more approved decisions in principle (DIPs), and better conversion rates to offers.
Given the constant evolution of lending propositions, effective communication and strong relationships are paramount. These relationships must be revisited regularly to ensure mutual benefits across the business chain.
Handling specialist finance cases can be time-consuming, often without guarantee of acceptance. A good packager handles sourcing, documentation, compliance, and lender liaison, freeing advisers to focus on their core business while meeting clients’ specialist needs.
For intermediaries who may not be experts in niche areas of the mortgage market, collaborating with a trusted packaging partner can help them better navigate the complexities of the short-term finance sector more efficiently and ensure better outcomes for their clients and business over the longer term.
Donna Francis, Managing Director at Envelop
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