View more on these topics

Jealousy is leading to criticism of bridging

PAUL BRETT, BUSINESS DEVELOPMENT DIRECTOR, BORRO
PAUL BRETT, BUSINESS DEVELOPMENT DIRECTOR, BORRO

There is an element of jealousy that inspires the sometimes negative perception of the short-term lending market sold to intermediaries by some industry experts.

The most prevalent gem suggests bridging finance and other short-term lending is the last bastion of professionals looking for a substitute for sub-prime lending.

This is nonsense as the purpose of short-term lending is encapsulated in its name. It is an avenue to funding where conventional sources are unable to respond because lending restrictions make it impossible or where a fast resolution is needed.

Everyone is familiar with the auction scenario and bridging gives clients the confidence to bid at auction.

But raising capital to deal with immediate problems like cashflow and new business opportunities or for tax bills and other demands for emergency funding require intermediary help.

For these and other uses, short-term finance has been useful, particularly as it is now possible to borrow against personal assets as well as property.

With the number of new lenders and investors coming into the short-term arena, it is hardly surprising some talking heads are miffed that our little backwater is becoming a force to be recognised.

Provided clients understand that short-term funding is just that and they have a planned exit strategy through longer term refinancing or ultimate sale, bridging can be recommended with confidence by brokers.

Recommended

HMRC should start investigating banks, FSA and politicians

There was a news story on Mortgage Strategy Online last week about HM Revenue & Customs launching 9,368 investigations into Inheritance Tax valuations during the past year and actively targeting estates and beneficiaries. But if HMRC is looking for something to do, why doesn’t it call in the Serious Fraud Office, and investigate the banks […]

Week in NUMBERS

£20 – The amount house prices rose in May compared with April, according to the LSL/Acadametrics index. £208 – The maximum amount Brits are prepared to carry in cash without feeling nervous, research by the Payments Council shows. 75% – The percentage of people who believe the gap between the highest and lowest earners in […]

Yorkshire issues its first RMBS to the tune of £750m

Yorkshire Building Society has launched into the securitisation market for the first time with a £750m residential mortgage-backed security. Brass No 1 plc is backed by prime owner-occupier mortgages originated by Accord Mortgages, the intermediary-only subsidiary of the Yorkshire. Chris Parrish, group treasurer at the Yorkshire, says the society originally planned to enter the securitisation […]

Newsletter

News and expert analysis straight to your inbox

Sign up