Last week, the FCA announced it would be clamping down on unregulated activities¸ which had the potential to undermine confidence in the UK financial system.

The regulator also said it would intervene when unregulated activities were closely linked to, or may affect, a regulated activity or call into question the suitability of the firm.

This announcement has called into question what the future may be for the unregulated bridging market.

When asked by Bridging & Commercial what this announcement meant for unregulated bridging, Benson Hersch, chief executive of the Association of Short Term Lenders, felt the FCA would look at instances of major negative impact on consumers.

“I do expect an increase in regulation of consumer credit, but the FCA doesn't currently have the resources.  

“Politically I also don't think that this is currently high on the agenda.”

Bob Sturges, head of PR and communications at Fortwell Capital, didn’t interpret the FCA’s latest announcement as an intention to seek wholesale regulation of what is currently non-regulated lending.

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"Where non-regulated lending is improperly used or abused to the detriment of individuals or to the economy as a whole, the FCA is absolutely justified in intervening; indeed, it has an obligation to do so.

“But properly conducted non-regulated activity sits outside the regulator's area of authority and should continue to do so.”

Jonathan Sealey, CEO of Hope Capital, also couldn’t see the FCA introducing total regulation to the bridging sector in the near future but could see further regulation in the long term.

“Lynda Blackwell of the FCA made it very clear at the ASTL conference that they will only increase regulation on a mandate from the government and I suspect the government has enough on its plate at the moment. 

“I do expect that there is likely to be a bit more regulation creep over the next few years however, of which this may well be the start. 

“However, while we don’t want or need blanket regulation, it is of benefit to every reputable firm in the bridging sector that unethical practices are stamped out and if these measures will help to do that, then they are to be welcomed.”

Bob felt the only people who should be worried by the FCA’s statement were those who wilfully and knowingly abuse the system.

“They deserve to be unmasked and censured.

“But I am certain that the vast majority of bridging lenders who offer non-regulated products do so in an entirely proper and legitimate fashion, while providing essential liquidity at a time when it is most required."