"The key is ensuring the product suits the client’s situation. Brokers play a critical role here by discussing a range of exit strategies beyond just selling property. It’s about preparation and knowing how to adapt if plans change."
FR: Bridging lenders have been using finance rate cuts as a tactic to stand out this year. Will this continue?
There are plenty of factors driving bridging rates. The Bank of England base rate is one, as are swap rates and individual lender funding. We’re a bank, so we raise our own funds through deposits, but non-bank lenders raise their funds from third-party sources, such as institutional lenders or family private offices.
Five years ago, when the base rate was far lower, bridging rates were much higher, meaning the sector earned far higher margins compared to today. As such, slashing rates alone is a fairly blunt business strategy going forward. Lenders need to differentiate themselves creatively through underwriting flexibility, unique criteria, service, or product innovation.
This year has seen plenty of healthy market competition. Less ability to compete on rates has driven some lenders to offer greater flexibility with criteria. Lenders’ strategies are often guided by their internal priorities, whether it’s volume growth, margin, or profitability.
FR: What kind of year has bridging had? What trends do you expect in 2025?
I think brokers found 2024 as tricky as the previous year. Many of us expected this year to be a growth inflection point, but uncertainty around the new government and fluctuating interest rates made it challenging. Still, the appetite to write business was clear, with lenders introducing a number of exclusive offers.
According to the latest Bridging & Development Lenders Association (BDLA) data, bridging has remained a cornerstone of the market. The data shows bridging loan books reached nearly £8.4 billion in Q2 2024, with completions rising to a record £1.74 billion, a 15.4% increase from the previous quarter. This trend shows no signs of slowing as stock shortages in the property market force buyers to secure new homes before selling their existing ones.
For example, bridging loans have become a vital solution for clients wanting to move into their dream home without having to wait for their current property to sell. Auctions have also seen increased activity, with investors, landlords, and even first-time buyers turning to this fast-paced method of property acquisition.
At the same time, we must caution borrowers to have realistic expectations. Exit strategies relying solely on selling property in a patchy residential market can fail, so it’s important for brokers to discuss a range of strategies to mitigate risks.
FR: What plans does StreamBank have to compete next year?
As a new bank, we’re still establishing ourselves but were profitable in our first year. We’ve developed a strong reputation for being competitively priced while remaining flexible on individual deals.
We’re not looking to compete on rates alone. Instead, we’re focusing on maintaining profitability and delivering exceptional customer outcomes. Consumer Duty regulations, which came into full effect this year, have shaped the way we approach customer interactions. At StreamBank, we ensure that if an exit hasn’t worked out, we engage with clients fairly to navigate a resolution. It’s not just about completing the deal — it’s about the impression you leave with people.
We also aim to improve our service further. Our quick turnarounds on applications — like the recent deal in Scotland completed in just 15 working days — showcase our ability to deliver fast, tailored solutions when it matters most.
FR: What would you say to those who claim bridging is risky because of its short-term nature?
Bridging is an enabler, not a risk. It allows clients to secure property quickly or take advantage of opportunities that would otherwise be missed. If a property needs work, or a buyer needs funds to act quickly, bridging finance can make that happen.
The key is ensuring the product suits the client’s situation. Brokers play a critical role here by discussing a range of exit strategies beyond just selling property. It’s about preparation and knowing how to adapt if plans change.
FR: How do you see the future of regulated bridging?
Regulated bridging continues to grow in popularity as a trusted solution for chain breaks and other time-sensitive scenarios. According to the BDLA, average completion times for bridging loans have improved, with many lenders reporting completion periods of under 50 days, driven by demand for flexible solutions that help buyers handle the complexities of buying and selling property in the current market.
With stock shortages and increased demand for faster transactions, we anticipate regulated bridging will remain a vital tool for brokers helping clients navigate the complexities of buying and selling property. At StreamBank, we’re focused on developing solutions that meet these needs while delivering a seamless experience.
