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It’s time to end undisclosed commissions

There is growing noise in the market about the non-disclosure to the end customer of proc fee payments made to intermediaries on non-regulated loans.

At the heart of this is a recent court case that has wide ranging implications for the lending industry. The outcome of the case makes it clear that if a lender has paid a commission to a broker which has not been disclosed to the borrower, that lender is now more at risk of the entire loan being set aside. And where a loan is set aside, this can mean that a lender will have to make a substantial payment to the borrower and, in some cases, the lender might also be required to pay damages.
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Fee disclosure takes centre stage

Set against the constant change of the previous 12 months, the bridging market has steered a steady course in recent weeks. The ASTL’s lending figures for the first quarter of 2021 showed that bridging completions increased by 10.7% on the same period in 2020 and that the value of loan books was up by 3.5%. Applications are continuing to climb faster than completions, which will be of concern for lenders that are currently underwriting £7 for every £1 that they complete, but the value of loans in default has fallen to just 2.2% higher than in March 2020, so there are plenty of reasons to be positive.
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Bridging Watch: Positive demand and positive evolution

Like most areas of the mortgage market, the bridging market has barely paused for breath since the beginning of the year. Brokers and lenders alike have spoken of increasing demand for short term lending for a range of purposes amongst homebuyers and property investors. And this demand has been confirmed by the latest ASTL lending data, which found that applications achieved £7.49bn in Q1 2021, an increase of more than 25.5% on the same period in 2020 and 12.0% higher than in Q4 2020. In fact, £7.49bn represents the second highest quarterly applications value on record, with the top quarter being recorded in Q3 2020, which included much of the pent-up activity coming out of the end of the first national lockdown.
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Taking a joint approach to tackling hot topics

At the ASTL we always look for opportunities to work collaboratively with our fellow associations in the specialist finance and intermediary lending markets, where it is appropriate to do so for the benefit of our members. This has driven a number of initiatives, such as a joint submission with FIBA regarding the stamp duty holiday and Robert Sinclair from AMI making a presentation at our annual conference.
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Landwood Group joins the ASTL

Landwood Group has become the latest professional organisation to join the Association of Short Term Lenders (ASTL) as an associate member.

Landwood Group are experts in Property and Plant and Machinery providing services in recovery and valuation, asset management, project and building consultancy and property auctions. It has a team of chartered surveyors across offices in Manchester, Liverpool and London.
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Bridging applications continue to climb

New bridging applications achieved £7.49bn in Q1 2021, an increase of more than 25.5% on the same period in 2020.

This is according to the latest figures compiled by auditors from data provided by members of the Association of Short-Term Lenders. The data shows that the value of new bridging applications in Q1 2021 was 12.0% higher than in Q4 2020 and 17.9% higher on the previous year in the 12-month period ending 31st March 2021, reflecting feedback from the market demonstrating increased demand from customers.
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Memery Crystal joins the ASTL

London-based full-service law firm, Memery Crystal has become the latest professional organisation to join the Association of Short Term Lenders (ASTL) as an associate member.

The law firm has a track record of acting for alternative finance providers, helping to develop their reputation and portfolio by delivering advice on creative security structures, lending terms and the suitability of agreements. Memery Crystal also advises UK companies seeking to raise finance through progressive schemes such as corporate mini-bonds, listed bonds and crowdfunding.

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Do we really know what receivers do?

There are so many more parties involved in the bridging process than simply a lender, customer and intermediary. Whether it’s facilitating originations, enabling completions, or supporting collections and recovery, there are many businesses that ensure our industry is able to function effectively and, at the ASTL, we make it our business to understand and educate about the role of those businesses and why they are important.

One question that arose recently was, do we really understand what receivers do? The role of a receiver has actually been around in one way or another for hundreds of years, but it’s one area of the process that I believe is still open to misunderstanding.
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We must be the voice of our customers

With the arrival of the third national lockdown, and following weeks of campaigning from the property industry, it is looking increasingly likely that there could be an extension to the SDLT holiday, avoiding a cliff edge end to the tax reduction at the end of March.

At the ASTL, we have collaborated with our colleagues at FIBA, to call for an extension to the deadline, and we haven’t been alone. Both IMLA and AMI have also spoken publicly about the need for an extension, as have many specialist lenders, and so it will come as welcome news if measures are taken to avoid a hard end to the window.
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