‘Significant’ number of bridging lenders to disappear after Brexit, says lender

'Significant' number of bridging lenders to disappear after Brexit, says lender




Ultimate Capital has warned that a number of bridging firms could disappear over the next few months following the UK's decision to leave the European Union.

Mark Holden, Group Managing Director of Ultimate Capital, felt that many bridging firms relied on the four wholesale banks who are looking to wind back their positions. 

“As a self-fulfilling circle of unnecessary gloom, we expect a significant number of stretch senior and bridging companies to disappear in the next six months. 

“Most borrow from the same four wholesale banks and lend on at a margin – cutting and pasting the same rigid terms on to their customers. 

“As they wind back their positions, look at their books and re-consider their over-weighted positions in London, there will be change.”

However Ultimate Capital said it had received a substantial number of new business enquiries following the UK’s decision to leave the European Union.

“In the last 24 hours alone, Ultimate Capital has had a substantial number of new business enquiries due to other lenders doing U-turns,” Mark added.

However, Mark did not believe that Brexit would affect the underlying fundamentals of the housing market and expected to see ongoing strong demand.

“Just 143,000 new homes were built last year, and in March, housebuild starts slowed to their lowest level in three years. Even if the Brexiters manage to ‘pull the drawbridge up’ – and that back-pedalling is already well underway – the 
UK needs 250,000 new homes a year to address the shortfall created over the last 20 years.

“Property has been our background for decades – we’ve seen and helped our customers to weather uncertainty before and through past recessions.”

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