Keith Aldridge, Managing Director of Amicus, believes firms will determine their own future based on their assessment of what is required under the directive and how it will impact their growth aspirations.
“After the dust has settled, there will be some that may decide the new protocols are not for them,” said Keith.
Jonathan Sealy, Chief Executive of Hope Capital, added: “Potentially, those who haven’t fully prepared for the implementation of the MCD may look or be forced to reduce their exposure within the residential side of bridging.”
However, both Jonathan and Keith believe the majority of the market will largely emerge unaffected.
“I suspect that the overall picture in the short-term sector will remain relatively unchanged and that most lenders will have accommodated for the changing landscape and it will be business as usual,” added Keith.
“Let's face it, if you want to sustain your growth ambitions, many more hurdles will come along. You just need to have the vision and the talented resource to understand the implications and plan accordingly.”
Looking further ahead, Stephen Wasserman, Director of West One Loans, firmly believes the introduction of the MCD will result in an increase in bridging lending.
“The new regulation is relatively straightforward to implement and may actually boost lending, rather than hold it back,” said Stephen.
“The new rules will also enhance the sector’s reputation, ensuring lending remains responsible.”
Jonathan is less optimistic in the short-term, but doesn’t envisage any long-term impact.
“I can’t see there being a long-term impact for those lenders and brokers who have taken the implementation of the MCD seriously over the past few months and prepared fully for it,” said Jonathan.
“Like any new regulation in any marketplace, it’s the way companies prepare fully in order to react to the changes within the market which will separate the weak from the strong post-implementation.”
Keith added: “The market will adjust to the changes and prepare itself for the next change and the next after that, and the strong will survive and the less so will have to accept the consequences.”
Stephen concluded that the MCD and incoming stamp duty changes are likely to boost an already growing residential bridging market.
“Residential property buyers will increasing[ly] require bridging loans to unblock property chains as buying a home becomes more complex,” said Stephen.
“The incoming 3% stamp duty surcharge should provide a further boost to business across the bridging sector as second home and buy-to-let investors rush to purchase before the tax hike.
“While it’s too late to obtain mortgages on these purchases, bridging lenders will continue to provide finance until much closer to the deadline.”
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