Cheval sees surge in regulated mortgages
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Short-term specialist lender Cheval says it has seen a dramatic turnaround in its typical loan profile, with FSA-regulated mortgages making up 60% of its total completions.
The lender says unregulated loans used to account for the majority of its lending book but that now the tables have turned.
Regulated mortgages soared to 60% of Cheval’s total completions in Q3, compared with 26% in the same period last year.
Cheval attributes this change in its typical loan profile to a sharp rise in demand for the ‘classic bridge’ regulated loan, where the time gap between the property purchase and the sale of the customer’s existing home is bridged.
The downturn in commercial property and the resulting declne in investor appetite has also helped to boost regulated mortgage business at Cheval.
Alan Margolis, chief executive at Cheval, says: “It does seem that there is a shortage of good quality residential property and a great deal of competition among buyers.
“By astutely using bridging loans, borrowers are able to quickly secure their target property.”
But he adds that the good homes are at a premium and cash remains king.
He says: “Prospective purchasers do not stand much chance if they do not have completion dates for the sale of their existing homes.”
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