As many an intermediary can confirm, lenders taking a decidedly risk-averse view on all but the surest of sure-deals has been one of the most challenging aspects of the downturn in the housing market.
For bridging lenders especially, adopting a cautious outlook on potential cases is often even more pertinent, as funds are required to be transferred quickly and redeemed in much shorter lengths of time than regular home loans.
Adrian Bloomfield, the chief executive of the industry trade body for bridging lenders, the Association of Short Term Lenders (ASTL), has said that in spite of the issues the sector faces, ASTL members still have an appetite to lend on “sensible cases”.
“I do believe that if a deal is introduced in the market and none of the big banks, well known names or any ASTL members will consider it, there’s probably a good reason for it.” He reasoned.
However, Mr Bloomfield went on to say that although the short term finance sector still faces considerable pressures in the current climate, with exit routes difficult to secure as long term lending activity remains limited, the risk of not lending is just as great for his members.
“People talk about lenders and quite properly refer to the risk involved in making loans.” Mr Bloomfield said. “If a loan is made there is always the risk that the lender is not going to be able to get their money back and then run into trouble. Of course this can be the case, but if a lender is not making any loans, it is worse as they are bound to run into trouble.
“If a lender doesn’t make loans and still has outgoings, such as rent and salaries, they are bound to go out of business and that is a risk you can’t afford to carry either.”