Fincorp: Bridging boom is a myth

The lender said it is time the bridging industry “grew up” and recognised the damage that hyping up the size of the market could do longer term.

Fincorp director Nigel Alexander said: “There’s a lot of money swilling around behind the bridging market because it can offer great returns to investors but there is only so much good bridging lending out there.”

He said there are lenders in the short-term market dangerously close to dropping their underwriting standards just to compete to do business.

And he added: “The danger is that every man and his dog thinks he can be a bridging lender and make pots of money. Investors are baying for more business and lenders without experience are taking the money and fuelling the myth that the bridging market can keep growing and growing.

“Well it can. But only because inexperienced lenders start to relax their criteria to get the loans out.”

Alexander warned that in the end it is the borrower who pays for the lender's greed.

Alexander’s comments come after the lender decided to revamp the Fincorp brand to celebrate its 25th year in bridging and re-iterate its commitment to make bridging “clear and simple”.

He added: “Fincorp has been around the block, survived through three recessions and we know our stuff. But we recognised that the bridging market is constantly changing and we’re simply making sure we stay on top of our game.

“There are so many good reasons to use bridging but we believe the whole market needs to grow up and start being honest with the borrower and their investors.”

As part of its 25th anniversary year the lender has also pledged to support the Cystic Fibrosis Trust, with a commitment to donate a minimum of £100 per deal completed during 2013.

Matthew Anderson, fellow director at Fincorp, said: “This charity is close to my heart particularly as my son suffers from the disease. It’s a privilege to be able to support such a good cause and I’m proud to know Fincorp is the type of firm that takes its responsibility to give back to society seriously.”