By: Vic Jannels, CEO at the Association of Short Term Lenders (ASTL)
As a market that is predominantly dominated by intermediary distribution, short-term property finance faces a challenge, in that providers of products and services effectively have two customers – the intermediaries and the end customers. It is important they have an in-depth understanding of both, but sometimes it can be easier to develop a more thorough understanding of the more immediate customer, the intermediary.
However, the truth is that is the end customer that must always be at the heart of what we do as an industry, whether that is lenders or intermediaries. And so, with this in mind, the ASTL has taken steps to better ensure that we, and our members and associate members are equipped with a more forensic, data driven approach to customer behaviour.
In recent months, we have engaged with our members to build a research plan to better understand consumer understanding and opinion of the bridging market. We collaborated with YouGov in building a survey and gathering results from a demographically representative cross-section of more than 2,000 UK adults. The results are in and we will be using these results to produce a White Paper that offers insights into bridging finance for a wide audience, with a view to raising understanding and education within our industry, but also more broadly amongst consumers and journalists.
At this stage, however, it is worth reflecting on some highlights. Interestingly, more than two thirds (67%) of respondents say that they are aware of bridging finance, while fewer than half of people (43%) say they understand how bridging can be used. However, dig a bit deeper and it seems this result may only mean that customers have a vague idea about the workings and uses of bridging finance and lack clarity when it comes to the current market.
For example, one of the main reasons cited by people for not considering bridging finance if it were appropriate for their requirements was the ‘high rates’. However, more than half of people (54%) admit to not knowing how much bridging rates are. It seems clear, from this and some of the other results in the research, that there are myths and preconceptions that need to be addressed.
Professional advice is an excellent way of addressing misunderstanding on an individual level, ensuring that borrowers are kept informed with accurate information. However, worryingly, only 21% said that they would go to a broker for a bridging loan. This is something we need to address as an industry and as part of our campaign at the ASTL, we will not only aim to raise understanding of the bridging market, but also to promote the benefits of financial advice. Look out for this in the coming months. Look out for the White Paper and further activity around this research in the future.
Vic Jannels, CEO of the ASTL
A version of this article appeared in the May digital edition of Business Moneyfacts