Clients willing to test unregulated lenders to avoid delays

by:
  • 04/01/2018
  • 0
Clients willing to test unregulated lenders to avoid delays
Brokers are seeing an increasing willingness from development finance clients to use unregulated lenders, even if it means higher fees or interest rates.

Service levels and certainty of finance delivery are the key issues which have been driving clients towards the unregulated market.

Blueberry Commercial managing director and broker Peter Bailey (pictured) told Specialist Lending Solutions that he was finding more clients were choosing that route and that referrals were increasing too.

“More clients are going in to the unregulated space,” he said.

“Often referrals are because either their network or compliance team won’t let them do it.

“Some smaller brokers also don’t have the capability or experience in placing these cases too,” he added.

Bailey noted that there were concerns or fears by firms about using unregulated lenders, but while the regulated path was often preferential, it was not to be feared.

 

Bank accounts slowing process

Kingfisher Property director James Maunder-Taylor echoed much of Bailey’s observations and added that some lenders which required a client bank account were slowing the process by as much as two to three months.

“That’s to the extent that we are seeing some clients turning to the unregulated space where it is quicker and more flexible,” he said.

“While it is more expensive, increasingly more clients are reluctantly paying those margins knowing the lender will perform within the timeframe promised.

“This means they do not lose the property opportunity and get the finance in time, so they can then get on site in time and so the product hits the market at the right time – be that a year and half or two years down the line,” he added.

There are 0 Comment(s)

You may also be interested in