Posts Tagged unregulated bridging loan

When completing on a property transaction, finding the right unregulated bridging loans can prove very challenging. This is not due to the lack of products available, but more choosing from the thousands of products on the market. Finding an experienced lender who can offer a loan that meets specific needs is also hard. Twenty years ago, not many property buyers would have considered bridging loans. At the time, this was due to specialist finance lenders making up a tiny proportion of the wider lending market. After the global financial crisis, however, bridging loans became a popular option for investors in need of tailored finance that could be deployed quickly, no matter how complicated their financial circumstances were. The bridging sector is now worth over £4 billion. What’s more, the impact of COVID-19 on the lending market has shown once again the importance of specialist finance in meeting the needs of buyers in times of crises. Market awareness of specialist finance is growing. As such, it is important for brokers, intermediaries and borrowers to understand the different types of bridging loans available and how these are regulated. Regulation in bridging finance The Financial Conduct Authority (FCA) regulates the financial services sector to protect consumers and promote fair competition. When discussing regulation in the bridging industry, people wrongly assume lenders are either regulated or unregulated. This is not the case. In reality, the FCA regulates certain types of bridging loans. So, what types of bridging loans are regulated? Regulated bridging loans In the UK, a bridging loan is regulated when it is secured against a property that is currently occupied, or will soon be occupied, by either the borrower or an immediate member of their family. These bridging loans can be either first or second charge and share the same regulations as