"The bridging market didn’t slow as many people expected it would and I can only see that trend continuing as we head into 2022."
FR: You joined Norton Broker Services (NBS) in late 2019 and have since been appointed to head up its bridging and development team. Tell us about your background and what your role involves.
I have over 20 years’ experience in the world of specialist finance, initially starting out as an underwriter at the second charge loan packaging service, Loan Processing Centre. It was here that I gained valuable knowledge on the specialist market, which laid the foundations for a long career in the sector. Over time, I have worked my way up to more senior roles, including heading up and growing specialist distribution firms, such as Clever Lending, where I spent six years.
My current role at Norton Broker Services provides a great deal of variety, which is very important to me in terms of job satisfaction. I am responsible for maintaining lender relationships, keeping up to date with industry changes, dealing with brokers and clients and growing Norton Broker Services’ bridging and commercial department, while always ensuring we are delivering exceptional service. I also keep a keen interest in Norton’s lending arm – Norton Home Loans.
FR: 2021 seems to have been a groundbreaking year for bridging finance due to the stamp duty holiday. How do you see 2022 shaping up for the sector?
Last year was an extraordinary year for bridging finance and even after the stamp duty holiday ended, the bridging market didn’t slow as many people expected it would and I can only see that trend continuing as we head into 2022. The stamp duty holiday highlighted the speed and flexibility of the bridging loan sector during what was a very volatile time for the mortgage market, and I think that speed and flexibility will continue to prove essential for those looking to quickly compete a housing transaction going forward.
As a business, Norton recorded its largest ever growth in the regulated bridging sector last year and we now have a dedicated team focused on providing advice to brokers, as enquiries are higher than they have ever been. The LTV ratios offered by some lenders have also increased as they look to take on more risks, and rates have been an ongoing race to the bottom, which shows the market is competing for business that is clearly in demand. How sustainable this is going forward, I do not know, but it is good for the consumer and good for the sector.
FR: Do you feel the new EPC rules for landlords will drive more landlords to seek bridging finance as an option to fund refurbishments?
Almost certainly as bridging loans are a perfect way for landlords to fund the works needed to refurbish their properties so they can improve their EPC ratings and bring them in line with the standards required for rental. Buy-to-let already accounts for a vast majority of bridging loan business, and with a high number of properties falling below the required EPC standards, I expect demand for bridging loans to increase even further to satisfy requirements.
Research from Shawbrook Bank has also shown that more portfolio landlords are likely to purchase properties rated D and below to refurbish them to standard by the EPC deadline than non-portfolio landlords. This opens up more opportunities to use a bridging loan to access funds quickly to renovate and increase the value of their properties before selling at a profit, while those who remain could benefit from the preferential interest rates of a green mortgage once the property’s EPC rating has been improved.
FR: Development finance can sometimes seem very complicated and specialist. How do you think more brokers can write this type of business and how does NBS support brokers, especially if it’s their first time?
Development finance can be a very complex area for brokers not familiar with the way in which the construction, conversion or major refurbishments of buildings is funded, so speaking to a specialist like NBS is the best course of action, especially if it’s their first time. This will help them to better understand what development finance is and how it works.
At Norton Broker Services, we talk them through the information that is required from lenders before approaching them for hard terms; we also explain the process in layman terms to both the client and the broker, which helps provide clarity and understanding around the offering. At NBS, we advise, educate and support the broker throughout the entire process and the more they use Norton, the more they will understand the market. Norton prides itself on its specialist knowledge and we want to pass this knowledge on to brokers to enable them to identify these types of specialist cases in their everyday work.
FR: What’s your one wish for the bridging and development market in 2022?
It would definitely have to be more education on the benefits of bridging and development finance for brokers. At NBS, we aim to do this on a daily basis, but I think the industry as a whole needs to work harder to continuously provide information to brokers so that they can identify bridging and development opportunities more easily.
The sector is growing and that there is a large and ever-increasing demand for knowledge from mortgage brokers. It is our duty to ensure they get the information they need so they, and the sector, can continue to flourish.