Head of business development
Drawbridge recently increased its proc fee on loans over £1m – What was the thinking behind this?
We have an appetite for larger loans. As we’re a small team we have to work just as hard on a £100,000 loan as we do on a £1m one, and everybody is beginning to realise that we have the funds and the appetite to handle big loans.
The idea is to entice intermediaries to use us. So if someone has a big loan they know we’ve got the funds to complete it and that they’ll get a bigger reward for using us. Basically, we think it’s a nice little promotion for brokers.
Are you going to focus on larger loans from now on?
It’s true that we have a sweet spot for larger loans but that doesn’t mean we won’t handle £100,000 business because we will. But we want it to be known that if there’s a large loan that needs to be placed we are the lender of first resort.
Do you think bridging should be regulated?
Some elements of it should be regulated but not others. And do I think buy-to-let should be regulated? No. Do I think commercial mortgages should be regulated? Absolutely not. But do I think first charge lending for bridging finance should be regulated? Absolutely, but not for commercial transactions – how could you regulate transactions that involve experienced investors? It’s a tricky question.
What effect would regulation have?
There are a number of players that do unregulated work and it would have a big effect on them because a lot of firms that apply to be regulated will not be approved. But of course many will, so regulation would get rid of firms that don’t have the appropriate systems, people and processes in place while those that are approved would trade appropriately.
What do you foresee happening for rest of this year?
I hope for improvement but I fear things will remain the same. Mainstream banks are still cautious and there’s not a lot of positive news around.
Until liquidity returns to the market and lenders start shifting their LTVs things will stay static. It’s going to be interesting to see what happens next year when the VAT rise comes into force and inflationary pressure takes a grip.
Interview by Christine Toner