Bridging lenders start to trim their margins

Bridging lenders have begun to trim their margins in order to remain competitive in the ongoing high-rate environment.

Speaking at Alternative Credit Investor’s property webinar last month, Andrew Caracciolo, a broker at Tapton Capital, said that a prolonged period of higher interest rates has begun to put pressure on alternative lenders.

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“We are seeing a number of lenders, particularly on the bridging side of things, begin to trim their margins to try and stay competitive and entice the customers in this high-interest-rate place,” Caracciolo said.

“I think towards the end of the year we’ll be seeing some reduction, but it’s not going to be as fast or as profound as we expected.”

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Fellow panellist Narinder Khattoare, chief executive of Kuflink, confirmed that his peer-to-peer property lending platform has already begun to squeeze its margins in response to high interest rates.

“We would like to offer more competitive rates to our borrowers, but it’s challenging,” he said.

“I think we will see a couple of rate reductions later on this year, and I think there’ll be a few more the year after.”

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