ASTL16: Regulator surprised at bridging sector quality

Robyn Ashman

September 22, 2016

The Financial Conduct Authority has found the quality of the bridging lenders under their auspices much better than it had expected, according to a top regulator. 

Lynda Blackwell, mortgage sector manager at Financial Conduct Authority, said the quality of both regulated lenders and deals was “really good” and “not what was expected”.

Blackwell confirmed that the FCA has had 40 lenders report to it as having transacted in regulated bridging.

Using the data provided the regulator claims around 16% of all bridging deals completed are regulated – based on estimates of the market which place it at around £4bn – or 0.15% of the overall UK mortgage market.

The regulator was also able use that data to extrapolate further information about the market. Key findings included:

  • 56% of all bridging lending is carried out in London and the South
  • Median bridging loan size is £229,000
  • Median property value is £575,000
  • Median loan-to-value is 45%
  • Median term is 12 months
  • Median rate is 7.8%
  • Median age of a borrower is 57

Additionally it found that 83% of all bridging deals were carried out through intermediated channels.

Blackwell said: “The quality we have seen has been really good and not what we expected.

“The data shows that the typical borrower is older and that the loan-to-values are conservative compared to the mainstream market.

“It is clear that the regulated part of the market can play an important and responsible part in the mortgage market.

“The regulated side of the market is built upon solid foundations and the regulated firms and industry trade bodies such as the ASTL, and Benson, deserve credit for this.”

Blackwell was speaking at the ASTL conference at Painters Hall, London.

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