Tatiana Withanage, founder and director of City Road Communications
The UK is currently in the throes of one of the most turbulent periods in its modern history. The result of the EU referendum on 23 June 2016 has set in motion a seemingly endless series of shock political and economic events, including: the resignation of David Cameron as Prime Minister; the appointment of Theresa May as his successor; an overhaul of the Conservative Cabinet; interest rates being cut to an all-time low; the official start of Brexit negotiations; and the calling of a snap General Election on 8 June 2017, which ended in a hung parliament.
Amidst a year of momentous change – one where a third of UK investors said that Brexit had impacted their financial decisions more than any other event in their lifetime – financial markets and entire industry sectors are faced with a heightened responsibility to provide opinion on areas that extend beyond their service proposition. However, while some industries have historical value and brand equity to remain robust in times like these, businesses operating in newer sectors have a far greater challenge ahead of them.
The bridging industry rose to prominence in the aftermath of a defining crisis: the 2008 global financial crisis. While bridging loans first emerged in the 1960s, it was only when the recession struck nine years ago that awareness of this form of finance began to rise; as banks and traditional lenders became more risk adverse and thus stringent in whom they offered credit to, bridging loans played a vital role in filling the funding gap. The industry was catalysed by a critical requirement for property investors – commercial and residential – to be able to navigate potentially crippling restraints resulting from the financial downturn. Subsequently, bridging has emerged as a pivotal tool for society to be able to complete on their financial plans in testing times, resulting in the total value of bridging loans reaching £2.83bn in 2016, up from £2.59bn in 2015.
Despite the sector’s marked growth in recent years, bridging is yet to enter the mainstream; industry understanding, education and awareness of alternative finance remains relatively low among both borrowers and investors. For bridging providers, this distinct lack of knowledge poses a significant challenge that must be addressed in order for potential education-based bottlenecks to be removed. A survey among more than 1,000 UK investors at the end of 2016 by bridging lender Market Financial Solutions found that over half (51%) of Britons with an investment portfolio worth more than £50,000 said they do not know enough about alternative finance to consider it an option they would feel confident to act on. With recent figures showing that mortgage approvals hit a seven-month low in April, the pressing requirement for bridging loans has far-from abated; yet a passive voice in the wider housing market has created a communications void that must be filled – and fast.
Following a year of significant surprises, there remains unrest and uncertainty in all segments of society as people question how these changes will affect their financial future. This presents a critical opportunity for informed industry leaders to take up the mantle to provide the clarity and confidence that both consumers and investors need, heightened in light of the spate of events that have defined the last 12 months of the UK’s economic and political calendars. For sectors such as bridging, where opportune moments to create a voice in the industry are paramount, windows of political change and economic transition present springboards for business leaders to propel onto the main-stage alongside their mainstream counterparts. These opportunities are only made available – in the absence of topical hooks – by PR agencies and connected press officers. In such instances, a directed approach of carving a reputation as the voice of the bridging industry within the broader financial arenas is key; nestling in the confines of specialist finance will seldom present platforms to amplify one’s corporate or personal narrative. In the bridging sector, this means presenting a clear message regarding the regulations that the company adheres to, the strength of its funding lines, and ultimately its ability to provide fast and efficient finance to support investment strategies during times of uncertainty. As the UK forges a new identity for itself outside of the EU, a significant opportunity lies with the UK’s bridging leaders to ensure an open and proactive approach in guiding their stakeholder – and wider media community – through the current climate of uncertainty.