Bridging lenders must think ahead about future interest rate rises, the ASTL has warned.
Speaking to Mortgage Introducer, Benson Hersch, chief executive of the Association of Short Term Lenders (ASTL) warned some lenders may be failing to take a long-term approach to interest rates.
Hersch said: “We seem to be locked into a low-interest mentality. People do not seem to be worried about the prospect of interest rates rising.”
“All the long-term products – 5-year, 10-year rates are a bit of a gamble. If there is a crack in house prices, then it could become a problem.”
Stating that re-bridging has become increasingly common post-2008, Hersch warned of the increasing need for businesses to manage the dissonance between ambitious sales targets and prudent risk management.