Bridging lenders are set to launch the Association of Short Term Lenders, a self-regulatory trade association with its own code of conduct.
The association will be headed up by Adrian Bloomfield, who will act as its chief executive.
Bloomfield has had over 30 years experience in the financial services and currently works as a mortgage and banking consultant.
The association will consist of 20 lenders, which will each have to follow a set code of conduct and adhere to certain levels of business standards.
Lenders in the bridging market have been in talks with the National Association of Commercial Finance Brokers and the Council of Mortgage Lenders over the formation of the association for several months.
The news will be welcomed by brokers in the market who have supported the idea of a lender trade association.
It is hoped that the code of conduct that lenders have to adhere to will do the same for the bridging market that the CML has done for the mortgage market.
Nikki Cann, director at the National Association of Commercial Finance Brokers, says: “We are always very supportive of any movement that encourages better business practices and cleans up the industry. We have supported the ASTL and look forward to working with it in the future on issues effecting our members.”
Mark Hutton, director at brokerage Bridging Direct, says it is commendable that the association has got off the ground, following years of lenders trying to agree, however, for it to work it must have teeth he says.
Hutton says: Its a double-edged sword, my hat goes off to them because they have been able to all sit around a table. The one thing that I would like to see is for them to be able to tell their members how to do their business.
“For example, with exit fees, if they dont tell every lender to have exit fees then what is the point, there needs to be a unified approach. The bridging market is supposed to have had bad press and yes, its good that the lenders have got together, but they need to show teeth, otherwise it is just another jolly down the pub.