Current Trends in the Bridging & Development Finance Industry
We speak with Steve Smith - Sales Director of Roma Finance responsible for executing the commercial strategy and managing the sales team to enhance the broker experience and business growth. He has an impressive background and is focused on supporting the finance and property market.
Roma Finance loves to lend and is dedicated to delivering an experience less ordinary. Focussed on bridging and development finance for property developers, investors and landlords, Roma delivers consistency and certainty allowing borrowers to achieve their property aspirations. Roma benefits from multiple funding lines, allowing the team to be highly flexible and agile while offering high levels of proactive support.
What are some of the key trends in the bridging and development finance industry in the current environment?
The bridging and development market is exceptionally busy right now and I don’t see this changing in the near future. With buy-to- let mortgage rates the way they are, bridging finance, which has always been viewed as a more expensive option, has become a more attractive option. There are also huge opportunities for property investors in the market in this climate and at Roma, we are experiencing heightened enquiries and completions. Bridging lending is up this year with a record £1.4bn lent in the third quarter, according to the latest figures from the Association of Short-Term Lenders. At Roma, we’re seeing strong levels of demand for refurbishments and plenty of commercial-to-resi conversions. We’ve also noticed a rise in co-living among groups of friends and family, particularly in the bigger cities, and the shape of our towns and cities is changing as retailers move out.
But it’s the residential sector that has been huge for us this year, with record demand.
What are the challenges the bridging and development finance industry will be faced within 2023?
The main challenges are the macro-environmental factors which are outside of our control – the cost-of-living crisis, the ongoing Ukraine war and political factors. The global backdrop and the UK economy are clearly the biggest challenges and, of course, the bridging sector isn’t immune to the wider world. It looks like we’re heading for recession and house prices will probably fall up to 10% this year. Some areas of the commercial sector – such as office space, pubs, restaurants and big retail sites are still experiencing challenges and will continue to do so in 2023. We have to be realistic about the market, but there’s plenty to be positive about too. Supply chains look to remain positive, and we are an island with not enough houses – there will always be demand.
As an overarching rule, the way Roma acts is our biggest achievement.
How are you planning to respond to these?
Roma has achieved significant growth in 2022. This year we will be more innovative. We’re planning to launch desktop valuations and in-house legals, because these are the areas where delays are currently out of our control because of external suppliers. So we plan to bring them under our control. We also want to launch some new products that meet the needs of the current market, and we’re flexible enough to get them out quickly. Our multiple funding lines allow us to be creative in the interests of all parties.
What’s your favourite thing about working within the bridging and development finance industry?
The bridging and development world is really very interesting, and it is fantastic to see the creations that we are involved in. I love meeting the developers and seeing their visions come to life, knowing that we had a part in it. The property industry is forward-thinking, and we have been involved with some fantastic developments including Carbon Zero properties – these are obviously popular given the present energy issues we are experiencing.
What are some of Roma Finance’s biggest achievements?
In 2022 we saw exceptionally high growth and back-to-back record months. We saw a high across new business, completions and more importantly redemptions in October. This record was then smashed in November. The industry remains busy. We have achieved big things in addition to our business growth, striving to ensure our customers have all the support they need to achieve their best possible outcome. We have launched and enhanced RomaFLOW, the fast-track bridging process to allow borrowers to complete their financial applications quickly without hassle. We are extremely proud of our tailored ‘Customer for Life’ process, allowing borrowers to transition through an entire project from development to bridge to buy-to-let. It allows a smooth, consistent process through and the release of funds at the end to move onto the next project. As an overarching rule, the way Roma acts is our biggest achievement. To put this into perspective, not one customer who was disadvantaged by either a time or money perspective wasn’t able to apply for a Roma fee-free COVID extension on their loan. Those COVID-extended loans have all had successful outcomes. COVID may seem like a memory to many now but the way we act has not changed.
What are your goals for the future?
A big goal is to continue to improve the industry as a whole. There is still so much education to do across the board. The world of bridging is so different to what it was 20 years ago and the big opportunities for property investors can often only come into fruition with bridging and development finance lending. Every decision made at Roma is based on the customer journey, and we will plan to continue this philosophy.