View more on these topics

CML urges caution over bridging finance

The Council of Mortgage Lenders says it welcomes increased regulatory scrutiny of the bridging finance industry.

The CML says there is an increasingly fuzzy distinction between bridging lending and long-term lending at a time when the market is being surrounded by hype. While it remains broadly supportive of the industry, questions have been raised about the quality of current business practices.

In its latest News & Views publication, the CML says:“Given that the reputation of good bridging lenders, as well as other mortgage lenders, has the potential to be affected by the activities of less scrupulous lenders and brokers operating in this niche area, we support a strong FSA line on “policing the perimeter” to ensure that business which should be regulated is not being written as unregulated.”

“The current levels of hype about this market – as well as the regulator’s concern, and the relative lack of reliable industry data – raise questions about the quality of current business practices.”

A recent survey carried out by United Trust Bank revealed that more than 80 per cent of brokers have used a bridging loan other than to bridge the gap between a property purchase and sale. Brokers are increasingly turning to bridging loans in order to solve problems surrounding short term cash flow issues and raising capital.

United Trust Bank says that between £1m and £5m of bridging business was placed by 39 per cent of brokers in 2011 while 9.4 per cent placed over £10m and 23.9 per cent placed over £5m.

The CML says that hard data on the industry is difficult to come by and there is the possibility that more certain elements of its success are overstated.

Recommended

BM Solutions scraps niche lending product

BM Solutions last week revealed it was closing its House 2 House product range to new business and launching two-year fixed rate products. The firm reports that the niche product, used for lending on second homes, accounted for just 0.2 per cent of all Lloyds Banking Group lending and will be closed due to lack […]

GRANT-SHAPPS.jpg
2

Mark Prisk replaces Grant Shapps as housing minister

The Minister for business and enterprise Mark Prisk has replaced Grant Shapps as housing minister, who has become the new Conservative Party chairman. Prisk has been in his role at the Department of Business, Innovation and Skills since May 2010. He was elected as the MP for Hertford and Stortford in 2001 and is a […]

BS lending rises 44% year on year

Gross lending by building societies increased 44 per cent year-on-year in July, according to figures from the Building Societies Association. Building societies lent £3.1bn in July compared with £2.1bn in the same month the year before. Lending also increased 14 per cent on June’s figures, which stood at £2.7bn. Mutuals took a 24 per cent […]

Apple: a stellar technology story

By Ali Unwin, head of technology sector research

Apple recently announced the highest-ever recorded quarterly net profit ($18bn), with the sale of 74.4 million iPhones helping the company deliver $74.6bn of revenue for the quarter ending December 2014. These sales were largely driven by strong demand for the new iPhone 6 and iPhone 6 Plus. Highlights included Chinese iPhone sales doubling year-on-year and unit growth of 44% in the US — supposedly a well-penetrated market. Apple ended the quarter with $178bn in cash on its balance sheet, having generated a staggering $30bn in free cash flow during the quarter.

At Neptune, we have been long-term believers in the Apple story, and continue to hold the stock in a number of our portfolios based on the company’s long-term growth prospects. This is predicated on our belief that Apple has proved thus far that it can — unusually for a consumer electronics company — maintain high margins for a sustained period of time, even as adoption of new technology slows down and competitors produce similar-specification products.

Newsletter

News and expert analysis straight to your inbox

Sign up