sk of stunting market ently unregulated bridging lending as well as buy-to-let lending


As a result, we could well see the appetite for bridging diminish as regulatory pressures impede property transactions.


Peter Turner,


commercial director, AToM


Whilst it may not be too palatable that we are looking at regulation from europe


determining the future of the overall mortgage sector, it does seem inevitable that the bandwagon will continue to gather pace in coming months. Having said that, regulation should still be regarded as necessary to instil and enforce a culture which ensures the safety and security of those investing their future in the potential of their new home or investment property. So, is it any wonder that legislators


are now considering bringing the same pressure to bear in the areas of bridging and buy-to-let? bridging is an area which undoubtedly needs some uniformity and clear outlines for prospective borrowers. it is a confusing and expensive area yet absolutely necessary to facilitate a wide range of transactions which otherwise would stall. i would expect that short-term bridging of less than 12 months will escape the need for legislation but that anything longer will be caught. Also, that it will probably only


apply to individuals and not corporate borrowers. Similarly, i would expect the buy-to-let market to come under the scope of regulation sooner rather than later. the overall effect will, of course,


slow the market down again as more rules and red tape come into play.


laurence Goodman, managing director, Bridgebank Capital


the whole of the property lending sector has been fully aware for a long time now, that


more and more regulatory control is to be imposed on lending activity. there is no doubt that this tide of change can’t be stopped or pushed back, as tighter regulatory control is a mission to be accomplished by both europe and the FSA. the issue is really only when and to what extent. certainly there must be an ongoing lobby with the rule makers to ensure that the rules imposed are both workable and sensible, notwithstanding that there is evidence to suggest that europe doesn’t really understand what bridging is all about, being a fairly alien, little used financing product outside of the uK. However, like it or not, the imposition of greater regulation will continue to grab all sectors of the market over the forthcoming years. those lenders not regulated will find it increasingly difficult to obtain authorisation, and


without authorisation may well eventually find that they are unable to lend. regulation will not impact on the demand for bridging funds from borrowers, the market opportunities will not diminish at all, but if some lenders are forced out of the sector, then regulated lenders will reap the benefit of greater market share. the real issue however, concerns


the extent of regulation on various lending situations and how this will affect the powers of recovery through Law of Property Act receiverships in the event of default. the main drawback of current regulated loans is that recovery or possession action must be processed through the courts, a long drawn out and expensive process which does put off some lenders from entering the regulated arena at present. However, the question that needs


answering is what will be the powers of recovery or repossession under a regulated regime for non-owner occupied / investment property lending?


Ed McAara, underwriting manager, Omni Captial


With the majority of bridging


lending at present being unregulated


it was an obvious move towards the regulation of all loans to individuals in the residential space. However, when and how regulation does 


Bridging introducer july 2011 35


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