There’s just six months or so to go until the UK is supposed to officially leave the European Union. As negotiations rumble on, we’re yet to see what kind of deal, if any, Britain will leave with. There may well be further delays and uncertainty if the proposed transition period from 29 March 2019 to 31 December 2020 does come into force.

Our departure from the EU may or may not present a threat to house prices, but it goes without saying that rising interest rates may prick the house price bubble. We have already seen one rise – the base rate rose to 0.75% in August – but the Bank of England was not expected to raise rates again until next year at the earliest. The path outlined at the August rise was gradual and slow, and concerns over the economy are likely to mean Britain does not deviate from that approach.

However, one concern is that, if Britain crashes out of the EU without a deal, the Bank of England will be forced to raise rates to defend the pound. We have already seen sterling fluctuate against major currencies in the two years or so since the referendum, so this is a legitimate worry.

Mortgage borrowers already go through “stress-testing” to assess ongoing affordability in the event of a rate rise. Whether this stress testing is sufficient remains to be seen.

What might happen in the bridging sector in a post-Brexit world? Personally, I think the upwards turn in bridging lending is likely to continue – and here’s why.

The ongoing uncertainty around Britain’s exit from the EU leaves borrowers, banks and other lenders without a clear picture of the next few years. However, the fundamentals underpinning the UK property market remain the same.

Supply-side shortages and high demand have pushed up house prices over the past 20 years or so. However, this time period can be split into two distinct parts: From 1997 to 2007/8, and the subsequent decade leading us to where we are today. The 11 years to Q2 2008 saw house price inflation of 199% across the UK and 220% in London. Since Q2 2007 prices have held steady – rising just 18% across the UK and falling 5% in London.

The past few years have seen Government efforts to make housing more affordable for first-time buyers. Measures have included the introduction of Help to Buy (to encourage first-time buyers to buy), disincentives for foreign buyers and changes to the tax regime (to encourage buy-to-let landlords to sell).

Help to Buy has helped thousands of buyers, but the main beneficiaries have been the large construction companies. Problems with the quality of new housing from the big players have been well-documented, leading to opportunities for small builders and property developers to get ahead. Often overlooked by mainstream finance providers, these smaller players have been turning to the specialist lending sector. Bridging and other specialist lenders can offer them quick capital and swift decisions required to get purchases completed and projects underway.

However, it’s vital that bridging lenders don’t rush the underwriting process in their bid to sign up new business. A realistic exit strategy is possibly the most important part of assessing the viability of a short-term loan and underwriters must take cognisance of changes in the property market as well as refinance options.

The bridging sector’s focus also needs to be on educating mortgage advisors who are either unaware of specialist lending products or shy away from them perhaps due to insufficient awareness of current pricing and criteria. Brokers could be encouraged to place more specialist business by being informed about the products available and how these can be used to solve problems. In turn, brokers need to ensure their clients fully understand how bridging products work.

In short, bridging finance is no longer seen as a last resort, but as a useful financial tool. And this approach will continue in a post-Brexit world.

Benson Hersch, CEO of the ASTL

A version of this article appeared in the October edition of Business Moneyfacts