84% of broker respondents to a recent survey said that they expect to write more bridging business in 2022 than in 2021, Glenhawk has revealed.
Only 14% of brokers wrote less bridging business in 2021 than 2020, the survey found.
Despite 74% of brokers believing that Permitted Development will enable them to arrange more bridging cases, borrowers have been slow to embrace the 2021 changes to PD rights, reflecting a lack of understanding in the market as to the opportunity it presents.
Nearly three quarters of brokers said that either less than 25% of their landlord clients (43%), or none (26%), have asked for them to arrange bridging finance relating to PD. Over half of respondents (54%) cited a lack of suitable properties as the main obstacle for this lack of demand, followed by fluctuating valuations and access to finance.
The survey also reveals that lenders are continuing to exercise caution, with 60% of brokers citing the placement of higher Loan to Value cases as their biggest challenge, followed by securing finance for foreign nationals (37%).
Nick Hilton, Glenhawk’s managing director, said: “Building on what was a remarkably robust 2021, buoyed by changing consumer behaviour, supportive government stimulus and a low interest rate environment, expectations are high for 2022. These findings align with the exceptionally high levels of enquiries we have generated so far this year, with the market opportunity as Covid-19 fades into the distance set to grow considerably this year.
“At the same time, there remain challenges, noticeably the continued need for lenders to simplify and increase transparency for the borrower process, whilst more highly leveraged schemes will remain out of favour, especially if recent global events take on a more urgent focus. Furthermore, despite the welcome changes to Permitted Development last year and optimism about its potential, huge swathes of the market remain unaware of the opportunity, so there is a signficant education piece to be undertaken in the coming months.”