a view and these three views are not aligned in any way. the FSA will produce a paper
FA: Wouldn’t that be another area to evolve product-wise and to not just how you’re underwriting your case and what terms you’re lending on but also to put in procedures to shortcut the deal? GB: We have team of solicitors and they know what they’re doing, they’re on our premises, we can almost walk a file downstairs and drive it through. What you do find particularly through a bridging transaction is that the clients solicitor is less educated with what they’ve achieved and how to do it. they may have used them for a property purchase 20 years ago and they just stuck in that mode of using the same solicitor. So they don’t necessarily have the skill or experience to drive a bridging loan through.
How will regulation affect the market?
RS: i think the problem we have on regulatory cases we have there are three parties to the debate at the moment. there’s the Eu who have a view, there’s the FSA who have a view and there’s treasury who’ve got
before the end of July and it’s likely anything under 12 months will be unregulated and anything over 12 months is going to sit in an regulated space. Well we’re trying to keep commercial out of it. it’s business to business. So if you set up a company to run buy-to-lets i.e. you’ve incorporated, you should stay outside. LG: Who’s first, second and third in the pecking order? RS: Europe is first, FSA is second but FSA will always listen to treasury because they have to. Although the treasury will say they have no power over them. it’s funny because the industry is fearful of regulation. FA: Does Europe understand? LG: Yes. But does anyone know whether there is an actual more sizable bridging industry in the rest of Europe? AC: Well most of Europe is all private rented. GP: i’m not sure if there’s a market of entry there, we stand out head and shoulders above other countries as to how we treat properties. We can buy it as a commodity, we look to make profit on it whereas most countries you just don’t get the market. RS: London understands that it is the most liquid property market in the world. AC: With Europe, the risk is we get the german regulatory regime in the uK just because they happen to have more weight across the country and clearly we are not the most Europe friendly
country in the union and there lies the risk. We have very different markets intermediated much more significantly than Europe and home ownership is considered completely different.
Where is the potential for growth?
PT: From our side of things i think it’s the property refurbishment. there’s nothing on the high street that’s filling that gap. LL: Yeah i would agree from the development finance space so the small end developers there’s just absolutely nothing out on the mainstream market. it’s still very closed. PB: Part of the reason we’ve positioned our self in the bridging market is effectively our product is a short-term loan but against something which isn’t bricks and mortar. You’ve got the small build-up or developer who just can’t get the finance they need. GL: good growth is just going to come from those people who are adding value so it will be those clients who are looking to do developments, do refurbs, add value to a portfolio that type of thing. that’s where the growth is probably going to be in this marketplace, it’s not going to be the regulated lending or our new weird and wacky way of lending but it’s going to be those people that are actually looking to increase the value of their investments by either buying more property or buying property to add value straight away through the refurb and looking at the development side of things. n
Short Term Lending Mortgage Introducer
Creative.indd 5
Experienced Support Teams
www.precisemortgages.co.uk
Experienced Support Teams
BriDging introDucEr july 2011 27 27/06/2011 18:42
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40