The centre of education will provide monthly workshops designed to explain the complexities of bridging loans, how they can be used and how they can provide a lucrative income stream. Cheval said it hoped that by providing these workshops, the unfavourable image surrounding the sector should be dispersed.
Cheval is to offer daily, rather than monthly interest charges, a minimum term of no more than one month, and no early redemption penalties, other than within the minimum term.
Cheval added that an important reason behind the growth of the bridging market was the burgeoning buy-to-let market. It explained that investor landlords realised they could get better value if they were able to buy property for cash and were not dependent on selling a property or awaiting mortgage finance. It also said homebuyers were using bridging increasingly to extract better terms from the vendor.
Mark Posniac, marketing manager at Cheval, commented: “There must be hundreds of thousands of landlord clients up and down the country who would benefit from this sort of swift availability of bridging finance, but who do not use it because it is unfamiliar territory to them and their broker.”
Peter Brodnicki, chief executive at the Mortgage Advice Bureau, said: “A lot of intermediaries just don’t even consider bridging finance. I think in the past some of the larger brokers have found it too expensive and more trouble than it is worth. Bridging loans are appropriate to a particular market and intermediaries probably do need to be educated. However, whether busy mortgage brokers will attend a seminar on them is doubtful.”
