Tiuta said that it will now be solely focused on the professional bridging loan market and in future will only deal with market professionals.
Martin Kearns, head of strategic policy at Tiuta, said: “Following a complete review of the business strategy Tiuta has decided that we will no longer accept any regulated loans for the foreseeable future as, in the event of a loan default, it can take up to a year to have the loan capital repaid which is not acceptable to our stakeholders. Plus the regulated part of Tiuta’s business made up only 2% of our entire loan book value and we feel the additional time and resource this takes can no longer be justified.
“The review has clearly highlighted that we should now focus all our efforts on the core business which is dealing with professionals who use bridging loans to often renovate or add value to a property and then replace our loan with a standard mortgage after maximising the value of the property. We believe our track record in the sector is second to none and already we are on course for our best trading month on record in May with the outlook for June looking even better.
“As a result of this decision we have decided to voluntarily remove our permission to offer regulated loans but remain an authorised business to manage and administer our regulated loan book.”
Mike Davies, chairman of Connaught Asset Management, said: “As one of the main funders of Tiuta’s loan book we fully support this decision as clearly it is in our investors’ best interests to ensure that if a loan ever does default in the loan book the capital can be reclaimed and reinvested as quickly as possible.
“Also the intention of the monies we lend through our funds is to the professional client wanting to bridge a property for property renovation, predominantly in the buy to let arena. Lending into the residential mortgage market has never been our focus. We have always discouraged regulated loan activity for this reason which is why it has always been such a small part of Tiuta’s business.”