The Intermediary – April 2025 - Flipbook - Page 55
Q&A
March, when the temporarily reduced thresholds
reverted. This is when customers turn to bridging
finance – to secure their purchase.
RA: Looking at last year, interest rates did not fall
as expected. Swap rates have remained higher
than anticipated, meaning prime first charge
mortgage rates also stayed elevated.
Many borrowers may still be hoping for lower
rates before the end of 2025. We’re seeing some
customers use bridging instead of committing to
high long-term fixed rates, waiting for better deals
later in the year. At the same time, other borrowers
are beginning to re-enter the market, realising
that ultra-low interest rates are unlikely to return.
As a result, we expect the mortgage and property
markets to pick up momentum this year.
RC: Bridging may seem expensive at first glance,
but it is often a necessity rather than a choice,
particularly for those who don’t fit traditional
affordability models in a higher-rate environment.
How might regulated bridging deal
types change this year?
RA: We’re seeing more properties that aren’t
currently mortgageable. Many of these require
refurbishment before they qualify for a standard
term mortgage, making bridging finance an
essential tool for property investors.
We’re also noticing an increase in capitalraising transactions, where homeowners use
their residential properties to release equity
for investment purchases or general financing
needs. Chain-breaks have been a common driver
for bridging, but as the market shifts towards a
buyer’s market, where properties sell faster, we
may see fewer of these transactions.
How can brokers maximise
opportunities in a market upturn?
RC: Brokers must have a comprehensive
understanding of the full range of financing
options available to their clients. The days of
operating within a narrow product focus are over.
Bridging, second charge mortgages, and
alternative finance solutions should all be part of a
broker’s toolkit.
Strong relationships with packagers and
specialist lenders are also crucial. These partners
can source bridging solutions and assist with
administration, allowing brokers to concentrate on
servicing their clients effectively.
For us, it’s still early days, but our packaging and
distributor relationships continue to evolve and
will play an essential role in the year ahead. ●
RICHARD ARMSTRONG AND ROZ CAWOOD
April 2025 | The Intermediary
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