The last Word
come it is not likely to be black and white.
As with most regulation it takes
many attempts before anything gets finalised, with the increased complexity in this case of the FSA and europe having to complement one another‘s policies. the FSA, whilst not too familiar with the bridging industry, has done its best to ensure that potential regulation will be well positioned by opening its doors to dialogue with the industry, in particular the Association of Short term Lenders. However problems are likely to arise on the back of the relative disparity between the housing and lending markets in europe and the uK. indeed it would be very difficult to have a one size fits all approach across europe that is effective; we have learnt the consequences of such with the recent credit crisis. Whilst regulation is inevitable is
unlikely to be imminent, as reflected by the recent delays with progress at the FSA. Hence the impact on the market is unlikely to be dramatic but more of a gradual move as more clarity is provided out of europe. regulation can only be a positive
for the industry leading to further transparency, consistency and fair dealings. indeed for the bridging market it serves as a platform to add credibility to what was once a cottage style industry.
Paul Brett, business development director, borro
i have always believed that the glass is half full not half empty. At the moment this
is no more than hype and should be treated with due consideration - as a wakeup call rather than the knell of doom.
36 bridging introducer july 2011
there is a special case to be made for our interpretation of what constitutes regulated and non-regulated lending. And there is precedent already for making the necessary dispensation. Admittedly that was on a national
level, when the consumer credit Act was updated, but i am sure that trade bodies and government will be quick to ensure that the uK’s regulated/non-regulated rules will be fought for. to have it otherwise effectively means one of most dynamic parts of the uK’s domestic lending market would be decimated overnight. i can’t believe the powers that be would be that short sighted. the concept of a uniform regulatory structure across the eurozone is a sensible aspiration, but in the same way that forcing the uK to have all cars drive on the right hand side of the road to ensure conformity with our european neighbours would not work, it makes no practical or financial sense for the uK to toe the line on certain aspects of these regulatory proposals from europe.
Gareth lewis, head of business development, Tiuta
there wouldn’t be many people who believe that regulation isn’t
vitally important for consumers when it comes to their residential mortgage. Whether we need more regulation at a time when the market is struggling to rebuild itself is a moot point, however in our minds there is certainly no need for greater rules and regulations around the bridging and buy-to-let sectors. certainly, we would envisage a serious impact if this was forced
through and by this we would mean greater costs for us as a bridging lender which would ultimately have to be passed down to our customer in the form of increased pricing which they would have to bear. there is also the issue of the end user of bridging loans – the vast majority of our borrowers are using the finance on a commercial basis either to invest, for development purposes or to carry out refurbishments on existing properties. this being the case there appears to be little need for a series of rules and regulations which attempt to give these borrowers the same level of protection as that which is needed for residential borrowers. these are commercial and investment decisions made by our customers and should ultimately be treated quite differently. Also, by its very nature, catch- all regulation is going to miss the nuances and subtleties of different product sectors. in a sense, the uK is fortunate in that it is has not just a mature mainstream mortgage marketplace but also various other non- mainstream lending sectors which are suitable for different borrowers with different needs. When you apply a broad-brush approach to regulating on lending in general then you tend to overlook those factors which make a sector appealing to both lender and borrower. there is also a danger that the european union fails to grasp the intricacies of these products and the way we lend and we are left with an entirely unsatisfactory state of affairs. A very strict regulatory system
for bridging loans may well make the product less successful and less appealing – and we should be under no illusions that bridging finance has been one of the few success stories of the lending industry in the
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