Short Term Lending
As we continue to dissect the fallout from the Budget for do-ers, savers and candlestick makers – or something like that – there is hardly time to breathe as the spring rush is firmly upon us.
The second quarter is here and, like the second leg of any relay race, the pace and intensity are going to increase.
As with any such race – and of course, it is a marathon, not a sprint – it is vital to keep focus and not drop any batons, balls or other paraphernalia.
Business is brisk and I am not complaining but, as always, there is more to operating in the specialist and short-term lending arenas than simply getting business through the door.
The MMR footprint is a large one and the upcoming deadline is sure to make its mark across all sectors. But for the moment, let us touch on another element of regulatory “concern”.
With regulation high on the agenda for many firms, and justifiably so, this has led to recent comments in the trade press on whether packagers need to be regulated, especially when dealing with short-term regulated mortgage contracts. Well, for what it’s worth, I believe this is a subject not up for debate. The Financial Conduct Authority has already clarified its stance on this matter, which is that as long as the packager has no contact with the customer and runs a strictly business-to-business operation, they do not need to be regulated.
Now, I accept that some brokers may prefer to “introduce” a bridging enquiry to a specialist but let me underline that, in the eyes of the regulator, that specialist remains a broker and is not classed as a packager. It is only those businesses offering both types of service as the same entity which may be running the risk of blurring regulatory boundaries for the customer as well as the regulator.
Still focusing on packagers and regulation, let me say how well new specialist distribution and packager alliance Equis has been received throughout the industry.
For those who might not be aware, Complete FS, along with All Types of Mortgages, Brightstar Financial and Solent Mortgage Solutions, has formed this alliance with a view to being at the forefront of any regulatory changes. Not to mention helping to raise standards across specialist services by offering a combined support service structure, adherence to an ethical code of conduct and partaking in regular dialogue with trade bodies as well as the regulator.
There is obviously still plenty of work to be done but it is great to see that the appetite for such an organisation exists.
Speaking of appetites, a mention must also go to the recent Mortgage Strategy Awards. Not only was the food great but the event itself was positively coursing with optimism not seen for many a year.
And it was great to see specialist lenders and support services so highly acclaimed. In fact, one of the highlights for me was that Precise Mortgages secured joint first in the Best Short Term Lender category.
The emergence of the new style of bridging lender, like Precise, whose products are competitive and terms second to none, has really helped push this sector into a much stronger, more transparent and highly professional place. So well done to Alan Cleary and all the Precise team.
A big congratulations also goes to Capital Bridging Finance for securing its first funding line since being acquired by Omni Partners in November 2013. The funding is said to have been secured though the Omni Secured Lending Fund, which launched on 1 February and gives investors direct access to the UK short-term secured property lending market.
Capital Bridging Finance also recently released the results of its second annual broker survey, the upshot being that lenders have responded to broker demand for longer-term, higher-LTV short terms. This is a step in the right direction and the fact that an impressive 92 per cent of those surveyed said that they expected levels of business in 2014 to be greater than those of 2013 added a nice cherry on the top of this particular study.
Mind you, I echo lingering broker concerns when the majority also extended calls for even longer terms.
In more event-related news, it has just been announced that the Association of Short Term Lenders’ annual bridging conference will take place at Painters’ Hall in the City of London on 16 September.
The moving of this event to a larger venue illustrates the growth and interest surrounding short-term lending. It represents an important date in the diary because it aims to access the impact of the outside factors affecting the growth of the market, such as European legislation and impending regulation.
Something we all need to keep our eyes on in the months ahead