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Fincorp: Boom forecast for short-term lending “potentially dangerous”

Bridging lender Fincorp has issued a warning to industry over the potential long-term damage that could arise from hyping up the size of the market.

Gross bridging lending was forecast to hit £1.5bn by the end of 2012 and continue an upwards trend over the course of 2013.

Fincorp director Nigel Alexander says projections such as these fuels the myth the industry can keep growing exponentially without a deterioration in lending criteria.

He says: “The danger is that every man and his dog thinks he can be a bridging lender and make pots of money. Investors are baying for more business and lenders without experience are taking the money and fuelling the myth that the bridging market can keep growing and growing.

“Well it can. But only because inexperienced lenders start to relax their criteria to get the loans out. We saw that out of control competition in the frothy days of the mortgage market and ultimately it’s the borrower who pays for lender greed. Bridging industry professionals should take a care not to fall into that damaging cycle.”

The Association of Short Term Lending’s figures for 2012 show the total amount originated over the course of the year fell short of this £ projection, instead totalling £1.054bn.


Bridging loans hit £1bn mark

The Association of Short Term Lender’s figures for 2012 show members originated £1.054bn in bridging loans in 2012, an 8 per cent increase on 2011. Demand for bridging loans soared in the fourth quarter of 2012 with £1.3bn in applications received, up 23 per cent on the third quarter. In total ASTL members actually advanced […]

First-time buyer total reaches five-year high

The number of first-time buyers reached its largest yearly total in five years in 2012, according to the Council of Mortgage Lenders. A total of 216,200 first-time buyers became homeowners in 2012, the first time the annual total has exceeded 200,000 since 2007 and a 12 per cent year-on-year rise on the 193,000 loans advanced […]


Guide: how to change your auto-enrolment support

As we approach the two-year milestone of auto-enrolment, employers have had the opportunity to truly assess the capabilities of their chosen support. They are also now realising that getting to the staging date was the easy part, and that support is required for almost every aspect of the day to day running of their scheme. With the three-year re-enrolment window coinciding for many with the total removal of commission and Active Member Discounts from pension-related products and services, as well as the introduction of the pension charge cap in April 2015, many employers will have no choice but to review their support options. But, what is involved in transitioning your auto-enrolment scheme away from your current support options? This guide from Johnson Fleming aims to outline some of these key areas and provide information and discussion points on what you need to consider.


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