Bridging Soup fires the questions at Roz Cawood, managing director, property finance at StreamBank, on why a more competitive bridging market should never come at the expense of sensible lending, strong exits and good customer outcomes.
Bridging Soup (BS): The bridging market feels more competitive than ever. What’s your view of the market at the moment?
Roz Cawood (RC): It definitely feels more competitive, which is a positive thing, as it keeps everyone on their toes and ultimately gives brokers and borrowers more choice. This is evident in the fact that there are more lenders chasing what feels like a smaller pool of business.
Purchase activity is quieter than many people would like, so naturally everyone is looking at how they can stand out. That’s where I think lenders have a choice. Do you compete by stretching criteria a little further, or do you compete by delivering a better overall proposition?
For us, it’s always the latter. We’d much rather be known for sensible lending, good service and taking a practical view of each case than trying to grab attention for the sake of it. Markets change, but those principles don’t.
BS: How has that changed what advisers are asking for from lenders?
RC: The biggest change I’ve noticed is that advisers are thinking much further ahead than they perhaps were a couple of years ago.
One topic came up time and again when I was out meeting advisers recently, and that was exits. I don’t think that’s a coincidence. Sales can take longer, refinance timelines don’t always go to plan and circumstances change.
That’s why we spend so much time discussing exit strategies. It’s all very well completing a loan quickly, but we’re always asking, “What happens if Plan A changes?” Is there another route? Could there even be a third option?
I think that gives advisers reassurance because they know we’re looking beyond the initial transaction and helping them build a solution that can adapt if circumstances change.
BS: Does your experience help you look at the market differently?
RC: I think it probably does. One of the advantages of being around the industry for a while is that you’ve seen different market cycles. Each one is different, but they all teach you something.
I remember periods where lenders were all trying to find a new way to stand out and, once the obvious points of difference disappeared, some started moving further up the risk curve. That’s why I always think it’s worth taking a step back and asking not just whether we can do a deal, but whether it’s the right deal.
That’s what sensible lending is all about. Looking after the client, supporting the adviser and making sure the loan still works just as well at the end of the term as it did on the day it completed.
BS: You spend a lot of time out meeting advisers. What’s the biggest misconception about bridging that you’re still coming across?
RC: I think it’s that bridging is still seen as something that’s only needed for unusual cases. Actually, advisers are coming across bridging opportunities far more often than they realise. It could be a chain break, an uninhabitable property or a landlord who needs short-term finance before moving onto a longer-term solution.
The scenarios themselves are quite common. What’s less common is recognising that bridging could be the answer. That’s why education is still so important. I always say to advisers, don’t be frightened of it. You don’t need to know everything. Pick up the phone, talk the case through and use your lender’s experience. We’d much rather help shape a case at the beginning than see somebody pass it elsewhere because they weren’t quite sure.
BS: You’ve spoken about exits. Do you think advisers are starting to think differently about the whole client journey?
RC: I do, although I think there’s still a clear difference between advisers. Some are brilliant at looking beyond the immediate funding need. For example, before the bridge has even completed, they’re already planning the refinance or the longer-term solution. They aren’t just arranging a loan; they’re helping the client reach an end goal.
Others are perhaps a little more transactional. They complete the bridge, move onto the next case and only revisit the client when the term is coming to an end.
Personally, I see that as a missed opportunity. The advisers who really stand out are the ones thinking six or 12 months ahead and maintaining that relationship throughout. We want to know what the borrower is working towards, rather than focusing solely on their position today.
BS: Finally, what are you most optimistic about for the remainder of the year?
RC: I’m actually quite optimistic about bridging. Yes, the market is competitive and there are challenges, but bridging has always proved its value when borrowers need flexibility. That’s not changing.
What gives me faith is the way the market has matured. Advisers are asking better questions, borrowers have a much better understanding of the product and there’s a much greater appreciation that a bridge is often part of a wider property strategy rather than a standalone loan.
Our focus certainly won’t change. We’ll continue taking a sensible view of every case, working closely with advisers and helping clients achieve the outcome they’re aiming for.
Because that’s what good bridging has always been about. Not simply completing a loan, but helping people move on to whatever comes next.
