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FCA pleased at state of regulated bridging finance market

The latest data from the Financial Conduct Authority (FCA) shows that the regulated bridging finance sector is performing well, and it remains vigilant about non-regulated bridging finance.

The FCA’s technical specialist Lorna O’Brien, speaking at the September 2017 Association of Short Term Lenders conference, said:

“[The data] paints quite a rosy picture of the sector that’s a long way from the heavily-indebted, sub-prime borrower who’s using bridging as a last resort that we’ve been worried about in the past.”

She pointed out that the data her organisation sees is based on information provided by FCA-regulated finance organisations. The FCA continues to monitor non-regulated bridging finance as far as it can.

O’Brien said that the FCA is interested in the experience of bridging loan customers and wants to make sure that bridging finance organisations are serving them well.

The FCA has, however, expressed a degree of concern about bridging lenders adapting to changing market conditions. Around 40% of bridging loans activity is in London and the South East, but this region has experienced a slowdown in buy-to-let property deals and this could affect the bridging finance sector throughout the country.

The bridging finance market has grown and developed over the last few years, but O’Brien has warned that the emergence of new business models in the lending market is challenging bridging companies. Peer-to-peer lending and technology-based fintech lending are competing with bridging loan lenders and brokers, meaning the industry will need to continue its high standards and strong performance.