The Last Word
Embracing the inevitable
Bridging was singled out in the Mortgage Market Review – is this a good or a bad thing for the short-term market?
Adam Tyler, chief executive, NACFB
With NACFB statistics of a 180% increase in short-term finance from our members, it is
quite evident that the sector has experienced significant growth. The total business introduced from our members is around £1bn and we would like to believe that these deals were all based around a well planned exit strategy – something that the NACFB recommends in all bridging cases. The major point that we feel should be addressed in the MMR is the definition of the borrower’s principal domestic residence needs to be tighter to define the domestic residence in which they are currently resident (in case of refinance) or will be resident in the immediate aftermath of this loan (in case of purchase). Another initial thought around service disclosure, is that it is important to understand that
34 BRIDGING INTRODUCER MARCH 2012
no broker can claim to source from “whole of market” as there will always be many smaller lenders that are overlooked – there is no comprehensive list or full representative trade body. As an Association, we are not completely averse to regulation but we feel it would only be beneficial if it manages to ensure that the sector can run efficiently – bridging is all about the speed of the deal and we need to ensure that this remains so. The NACFB has already met with the FSA and will be producing a full paper on the latest MMR proposals, followed by a representative member group meeting at the FSA in mid March.
Steven Nicholas, chief executive, Tiuta
The FSA’s focus on regulated bridging within the MMR was perhaps no surprise. We are an authorised
lender however we have chosen not to conduct new regulated business so much of the proposals have little impact on our business. However, this is not to say that these proposals are not significant and will clearly mean changes for regulated firms. One gets the feeling that, with the MMR, the regulator is still trying to get a feel for the bridging sector. However, in another sense, it appears to have made up its mind that there is a certain level of ‘abuse’ taking place. It is obvious that the appropriateness of the advice will be given far more attention; the FSA appears convinced that bridging loans are being ‘sold’ when there are more appropriate products available to clients. The interesting part for regulated advisers is that, even if the loan is non-regulated, the FSA will have the right to question the advice. This is much the same tack that is being taken with IFAs with unregulated products such as Unregulated Collective Investment Schemes. Even though the
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