Page 38 - Bridging & Commercial Magazine Issue 5
P. 38

 Words by BETH FISHER is well known that the majority of the bridging market is unregulated, which means very few barriers to entry. According to the latest EY UK Bridging Market Study, 83% of lender respondents reported that their proportion of regulated vs unregulated bridging loans was at least 1:2. Some 26% of lenders had a ratio of 1:5. As a result of this, it is much easier for lenders to enter the space as soon as they want to if they intend to only offer unregulated bridging finance, as there are no strict rules and requirements to secure lending permissions from the FCA or any other trade body in order to operate. According to Adam Tyler, executive chairman at the Financial Intermediary & Broker Association (FIB A), there has been no real change in the unregulated space to limit new lenders entering the bridging market. HOW EASY IS IT TO SET UP A BRIDGING LENDER? HN W individuals and family offices—which back 40% of the bridging market, according to our research in January—are currently seeing low returns on money held in traditional savings accounts and are looking to the property market as an area which is still seen as a healthy and safe place to make good income on capital, due to the high- yield, asset-backed nature of transactions. Investors looking for alternatives can move into the sector with ease. I am told that anyone with money and access to solicitors can essentially set up their own bridging company. “At the moment, any lender can register a charge and start lending,” says Paresh Raja, CEO at Market Financial Solutions. “Although I am sure there is more to it, from our point of view, it appears all you need \[is\] a funding line, a LinkedIn account and a BDM and you are good to go,” adds Sam Norris, senior property finance broker at Bond Finance Ltd. Cover story     36  Bridging & Commercial 

   36   37   38   39   40