One month in to 2024, what does the year have in store for the bridging market?
The short-term property lending sector doesn’t exist in isolation, of course.
It’s a small but important cog in the workings of the wider mortgage market, and buy-to-let rates, in particular, play a key role in a viable exit route for bridging finance.
There has been a high take-up level for CPSP exams
Term mortgage rates were showing positive signs of reduction towards the end of 2023 and in the first working week of 2024, and this was reflected in increased mortgage enquiries in all sectors. In bridging, there was a sense of growing confidence.
However, at the time of writing there has been a marginal rise in swap rates, which is most likely linked to an increase in the cost of living on the back of higher-than-expected inflation figures.
This rise in swap rates has had an immediate effect, with some term lenders repricing upwards and one withdrawing its full offering. At the same time, other lenders have continued to make rate cuts, so the outlook remains unclear.
Here we are at the start of the year, then, with no certainty on the direction in which rates will travel. This, coupled with the fairly dramatic conflicts going on in far-, and not so far-, flung corners of the world, only serves to suggest that we are unlikely to have certainty this year for some time yet.
We continue to engage with the regulator and are grateful for our half-yearly meeting
Bridging finance is, of course, perfectly suited to periods of uncertainty, providing valuable funding to bridge a period of transition for a variety of purposes. So, we should expect the market to remain resilient throughout the year.
There is also a good chance that it will continue to demonstrate growth similar to the impressive levels we have seen in previous years.
My optimism here is based on the growing reach and reputation of the bridging market, with an increasing number of brokers engaging with the sector and recognising the many ways it can be used to benefit their clients.
Targeted education
A fundamental part of this growing reputation is the Certified Practitioner in Specialist Property Finance (CPSP) accreditation.
This optional e-learning programme covers bridging, short-term finance, development finance and specialist buy-to-let, and provides a definitive and targeted education programme for the short-term and specialist lending sector.
Participants who complete the modules are recognised through the award of a London Institute of Banking & Finance (LIBF) digital badge and are accredited for CPD purposes.
Here we are at the start of the year, then, with no certainty on the direction in which rates will travel
Since the launch of the CPSP in mid-2023, more than 500 advisers have registered and nearly 100 have completed it, passing the end of programme assessment. Some large broker firms have also committed to supporting their advice team in advancing their expertise by studying and sitting for the CPSP accreditation.
All three promoters of the CPSP programme — the Association of Short Term Lenders, the Financial Intermediary & Broker Association and the LIBF — have been delighted to see the high take-up level and examination success across the sector. This can only help to promote a wider perception of enhanced professionalism and serve the sector well.
At the ASTL we are not stopping there. This year we will look to work with members of the national press to encourage their understanding of how the CPSP will help to ensure the highest quality of advice for the end customer.
We will also encourage the public to look for those who have studied and passed the CPSP paper when entering a short-term lending project.
Bridging finance is, of course, perfectly suited to periods of uncertainty
We continue to engage with the regulator and are grateful for our half-yearly meeting, during which we are able to share a conversation regarding our market sector and the benefit it brings to the wider mortgage marketplace.
We feel that these discussions can be a yardstick in gauging the temperature of our market, and can help us to better understand the regulator’s thoughts on how the sector is progressing.
One thing we can be sure of: amid the uncertainty of the wider political and economic environment, the bridging market continues to progress in the right direction. This is thanks in no small part to the professionalism and customer focus of those who work in our sector, and of those members of the ASTL who adhere to our strict membership rules and Code of Conduct.
There are reasons to be cautious as we look ahead this year, but also many reasons for optimism.
Vic Jannels is chief executive of ASTL
This article featured in the February 2024 edition of MS.
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