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BridgingWatch: A capital move?

Is Capital Bridging’s move to become a regulated lender a positive shift towards the industry embracing a fully regulated environment?

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Last month, the short-term lending arena lost a true legend as we said goodbye to former Association of Bridging Professionals chairman and short-term lending mainstay Sidney Cohen. Echoing the comments of Brightstar chief executive Rob Jupp, he was a larger than life character with a fantastic sense of humour and fun. He will be sadly missed but never forgotten.

Sidney was a man who had certainly experienced the highs and lows of the bridging sector and through his work with the AoBP consistently waxed lyrical about the virtues of bridging finance, working hard to raise its prominence, especially within the intermediary market.

Of course, this education remains an ongoing process but I thought this might be an opportune juncture to really underline the scope and flexibility of bridging by detailing just some of the variety of cases we have handled this year.

We have helped package deals across England, Scotland and Wales, with the smallest bridge completed on being £30,000 and the largest £18m. The fastest deal funded from enquiry to completion was a mere 72 hours.

In terms of the differing circumstances and types of use for funds, below are just a few examples:

  • Vacant pub to HMO flats for student lets.
  • Vacant pub to house for family to live in.
  • 15,000sq/ft luxury detached dwelling with a gross development value of £14m. Funded from purchase of land site and full build to completion.
  • For property developer to convert three floors of vacant offices to eight apartments under permitted development rights.
  • To convert a disused church hall to a residential property.
  • To buy back a 30,000 sq/ft warehouse site from receivers, funding 100 per cent of the purchase price to buy back asset and saving client’s recycling plant business in the process.
  • To help a new restaurateur raise capital to convert a vacant former pub into a top restaurant in Kensington.
  • To raise capital for a property developer to expand his property portfolio and acquire further property assets.
  • To raise funds quickly to pay for a costly divorce settlement with a Court Order in place.

For those brokers working within the specialist lending markets, the benefits and flexibility attached to bridging finance have long spoken for themselves. But for those not fully versed on the kinds of situations when it could be viable, it certainly does not hurt to offer some timely reminders.

Focusing on other recent news within the general bridging sector, Capital Bridging has announced becoming a regulated lender. This move is of particular interest after comments from FCA manager of mortgage policy Lynda Blackwell at the recent Association of Short Term Lenders annual conference in London when she was quoted as stating that: “The FCA-regulated bridging market has come a long way but concerns remain about the market.”

She was also said to have expressed her concerns about non-regulated firms, suggesting that the FCA was monitoring them despite their current status: “Non-regulated bridging lenders remain a concern for us and we currently have a team monitoring them,” she said. In addition, she called on the market to help the regulator root out firms which are engaging in bad practice. So is the move from Capital Bridging a further positive sign of a shift towards the industry embracing a fully regulated environment?

This remains to be seen but whatever the motivation behind any individual lender in terms of their regulatory status, it is important to remember a regulatory badge of honour does not necessarily mean a superior product or service. And it is evident that the need for non-regulated loans is unlikely to diminish as large numbers of property professionals continue to seek a host of funding solutions to match their individual requirements.

In other recent developments, we have seen Montello Bridging Finance take on a name change as LendInvest. This represents an interesting move and one worth following in terms of how it might reflect on volume and product development not to mention whether this will further underline a greater rise in the level of peer-to-peer property funding.

In short, the short-term lending arena continues to illustrate no shortage of solutions, resilient growth and strong levels of activity. And looking forward there is nothing to suggest we will not be seeing even more fireworks within this sector any time soon.

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