Legal issues ‘biggest obstacle’ for bridging loans
The biggest obstacle cited by brokers for slowing down bridging loan deals are solicitors, a survey by Regentsmead has found.
Most brokers lay the blame with solicitors for being the biggest issue for a bridging loan deal being completed quickly.
When questioned, one anonymous broker said that while it can be frustrating dealing with legal issues he pointed out that many forget that solicitors are protecting the interests of the client and of the lender.
Demand for higher LTV bridging loans
The development finance provider’s also revealed there is an even spread of demand for higher LTV (loan to value) loans, lower rates and for a quick turnaround on decisions.
A spokesman for Regentsmead said that while they were optimistic about the future of the bridging loan market their survey revealed that brokers were expecting growth this year.
He added: “We had a great response and excellent feedback to the survey.”
The firm says that the bridging loan industry should offer quicker responses to applications – Regentsmead will respond to an introducer within minutes and this should be a ‘standard’.
Nearly three-quarters of respondents praised the firm’s paying referral fees at the offer stage rather than waiting for the loan to be drawn down – and outstanding feature of the company’s bridging loan lending practice.
FCA drops talks on Connaught losses
Meanwhile, the Financial Conduct Authority (FCA) has announced that it is dropping its bid for securing compensation for investors in the collapsed Connaught Series 1 fund.
The fund, worth £118million, was the subject of negotiations between the FCA and its former authorised corporate directors Blue Gate Capital and Capita Financial Managers.
Instead, the regulator is now investigating the activities of both firms.
Investors lost out when the fund was suspended in March 2012 and then went into liquidation in September that year after investing in Tiuta, a bridging loan firm.
Connaught investors have compensation setback
Of the assets, investors have recovered £8 million so far.
The process for redress for investors was meant to end in October 2014 though this deadline was extended to January 2015.
In a statement, the FCA says it will now ‘formally investigate both operators’ and their activities in the failing of the fund.
The regulator added that it had been supporting negotiations between all parties for redress for the losses incurred by investors
The statement adds that there will be no further comment until their investigation is concluded and they have made a statement because of the level of ‘public interest’ in the issue.
The FCA statement also points that because a firm is under investigation does not mean they are offering a conclusion on whether ‘any wrongdoing has occurred’.