The Association of Short Term Lenders is seeking a total exemption for bridging lenders from the European Commission’s mortgage credit directive.
Under proposals in the draft directive, lenders must provide borrowers with a European standardised information sheet giving key information about the loan being offered and must assess affordability.
Currently, only first-charge bridging lending is regulated by the FSA but the EU draft directive indicates all bridging lending would fall under the directive.
ASTL chairman Adrian Bloomfield says: “The directive would add enormous costs to the sector and would inhibit short-term lenders’ ability to lend within quick turn-round times. It is for this reason we are asking for a total exemption for short-term lenders. The directive is aimed at mainly long-term mortgage lenders. The requirements to protect a consumer, who is taking out a 25-year mortgage for a property he is going to live in, are completely different to the requirements of a small businessman who wants a loan for six months.”