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Building societies ‘in good position’ for bridging, say brokers

  • 16/05/2017
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Building societies ‘in good position’ for bridging, say brokers
Building societies could take a share of the bridging market provided they’re willing to invest in their propositions, brokers have claimed.

Earlier this year reports claimed a number of building societies were looking to enter the bridging market, raising questions over whether the sector, traditionally known for its safe and stable approach to lending, could compete in such a market.

However, mortgage brokers believe some of the smaller mutuals in particular are well placed to make a mark in short-term finance.

Because the smaller building societies like Saffron and Buckinghamshire already use manual underwriting they are in a good position to consider bridging but need to make sure they are adequately and appropriately resourced, both in terms of the specialist underwriting required and admin backup,” said Ray Boulger (pictured), senior technical manager at John Charcol.

Andrew Montlake, director of Coreco agrees.

“There is no reason to believe that a building society cannot provide the levels of service required in this sector, as long as it is a sector they are serious about growing,” said Montlake. “We already get some excellent service from some societies and there are a whole host of different reasons why clients require a bridging loan that is not just predicated on speed alone.”

However speed does remain a concern for some brokers.

“The upside is that societies will be able to compete on price and could bring rates down and offer an ethical stance to the market,” said Phil Whitehouse, managing director of MCI Mortgage Club. “Processes will be tight and the admin of the loan should be done with good procedures in places.

“However, there is a danger they will be too slow and cumbersome and overly cautious underwriting  may not be nimble enough. There are lots of good existing players out there already, this is an area that a traditional building society will need to tread very carefully as a few mistakes could be very costly to them in a number of ways.”

Robert Thickett, mortgage policy adviser at the Building Societies Association, said the trade body was aware that some other societies were exploring the bridging finance market.

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