"Bridging increased to 48% of the enquiry mix – as rates on these short-term lending products have not been impacted in the same way as fixed term deals"
The past few weeks, since the mini budget was announced, have been a little turbulent across the industry to say the least. Looking at the mix of bridging finance, buy-to-let and second charge enquiries received at Crystal Specialist Finance, they have fluctuated weekly depending on how brokers have reacted to market conditions at the time.
Broadly speaking, in the four weeks since the mini budget, the enquiry mix across these three products have been impacted by the announcements but have remained broadly the same – which is a testament to mortgage brokers as this indicates that they have kept cool heads and not made knee jerk reactions.
| Bridging | Buy-to-let | Second Charge | |
| Four weeks post-budget | 38% | 45% | 17% |
| Four weeks pre-budget | 42% | 42% | 16% |
But, if we look at individual products by week we see a different picture.
For example, last week, second charges were 23% of the enquiry mix across these three products – the highest it has been in the four weeks post-budget or four weeks pre-budget. The reason for this is likely that brokers are using this product as a tool to borrow for their clients, while not disturbing low rate, fixed term deals that are already in place.
In the same week, bridging increased to 48% of the enquiry mix – as rates on these short-term lending products have not been impacted in the same way as fixed term deals and they provide clients with some breathing space while the fixed term market settles.
Other advantages of bridging finance are that they can be completed in much shorter timescales and exited without ERCs. They also don’t require lenders’ stress tests to be passed – which are causing challenges for some in the buy-to-let space.
As we specialise in complex buy-to-let at Crystal, we have been less impacted by these challenges simply because we work with brokers whose clients are generally more experienced portfolio landlords, who can use product features such as top slicing to consider other income streams across their properties to borrow.
The few weeks post the mini budget have been busy for Crystal, as brokers have had to increasingly look to the specialist master broker to help them navigate the volatile market where lenders have withdrawn products with little or short notice or changed their lending criteria.
Enquiry volumes have been very healthy with the highest weekly number recorded in 2022 last week.
With a new prime minister now in place, markets have reacted favourably and across the industry we are now looking to the fiscal statement of 17th November to give us a clear direction and stability back to the property finance market.
