Nearly half (46%) of brokers say the rush of new lenders into bridging has not had any positive impact on the market, with one in four saying that the impact has been wholly negative.
In a poll of brokers carried out by bridging lender West One Loans, 15% suggested lenders are rushing into an industry they don’t understand, while 11% also said the increasing number of lenders has made writing bridging loans more complicated because of the range of criteria between lenders.
Duncan Kreeger, chairman of West One Loans, said: “With the bridging industry performing so well, inevitably it has attracted some unscrupulous figures from the mortgage industry’s past.
“They see bridging as little more than a cash cow to be plundered in the short term. They offer misleading headline rates, hoard proc fees, and attract negative press to bridging as result.
“We need to make it clear there is no room for these people in the bridging market. Professionalisation of the industry has come on leaps and bounds in the last few years – that is partly what is driving its success.”
Brokers did reveal that some positive changes have resulted from the influx. Just over a fifth (22%) said they felt pricing has fallen because of the increased competition and 13% feel having more lenders in the market has improved the overall quality of service.
Kreeger said: “It’s clear that brokers think the influx of new lenders has improved some aspects of the industry.
“They say competition has increased, which has pushed down costs and helped raise standards – but only up to a point. The shadier operators are threatening to sully the reputations of all bridging lenders.”
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