Tough rules on lending are already hitting millions trying to get a mortgage and many borrowers are turning to the bridging industry for help, according to short-term secured lender West One Loans.
Britain’s mortgage drought has seen the proportion of bridging customers – traditionally landlords, developers and businesses – who are owner-occupiers increase. In February 2012, owner occupiers represented 16.0% of bridging loan customers, according to mortgage brokers polled by West One Loans. That has now climbed to 18.2%.
Mainstream lenders’ ability to lend is already being hobbled as they have to increase their capital reserves.
But the Bank of England’s Financial Policy Committee has now told banks to raise even more capital to build up their capital buffers, to cover the risk of losses on loans to borrowers who may struggle to repay – meaning they have even less money to lend to borrowers.
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