Voluntary Code of Conduct For Bridging Loans
Members of the bridging loans industry are being put under increased pressure to subscribe to a new code of conduct that is being created with the help of the Council of Mortgage Lenders. The code which would initially be voluntary would ensure that bridging loans are only used in appropriate circumstances and that they are not given to consumers who have no chance of repaying them. They would also look at ensure the fees that are charged by bridging loans lenders and bridging loans brokers are proportionate to the work involved.
Bridging loans are growing in popularity and the industry lends over £2.5 billion a year and that figure is steadily increasing. If the code is not adhered to then the chances are that this type of loan could become regulated by the Financial Services Authority warns bridging loans.co.uk.
Bridging loans can be used for a variety of purposes but are usually seen as a loan of last resort when looking to break the chain in a house purchase.