West One broker survey reveals borrowers do not understand bridging.
West One's latest broker survey reveals many borrowers are still unsure as to how bridging can help them get short term funding. Shortage of funds is a huge problem in the UK. Funding problems in the construction industry have been named by the economist Howard Archer as one of the main factors behind a 2.5% fall in output in the first quarter. And when it comes to business loans the picture isn’t much better, with schemes like Funding for Lending having a negligible impact. Business lending in the UK fell again in the first quarter, and has been on a downward spiral since the end of 2011.
It’s even worse for small businesses. The government’s flagship Enterprise Guarantee Scheme lent a meager £93 million pounds to small firms over the last three months – a fraction of the efforts made by the bridging industry.
But according to mortgage brokers, in our latest survey, bridging loans can provide an answer if only their clients understood how it could benefit them. Over a quarter (76%) of their clients do not understand the bridging process. And 27% of brokers believe a lack of knowledge is the biggest barrier of all to the wider take-up of alternative finance – a bigger drag than slow solicitors, or even ponderous credit departments.
More than 4 in 5 brokers (81%) think potential borrowers are missing out on very real opportunities as a result. They’re right.
Bridging is economically useful, getting vital developments moving. And whatever the future holds for the mainstream market, bridging is set to continue its expansion. The latest West One Broker Sentiment Survey confirms that trend and our direct experience is an industry that keeps on charging ahead.
We’ve created a video to help clients, Bridging in 60 seconds, because we’re committed to closing the gap in understanding. This will help brokers arrange deals and get real-life projects off the ground. A lack of awareness is a sign of the youth and innovation of the bridging industry. Far from a problem, the understanding gap represents just how much space bridging has to grow.