Who are you?
Adrian Bloomfield, chief executive of the ASTL.
What is your background and what do you feel made you suitable for your current role?
For more than 30 years I have been involved in various mortgage and banking businesses as a broker, a lender and a financier. I have been engaged in consumer finance and secured loans, both residential and commercial. I have long experience and comprehensive familiarity with the short term lending market and all of the main players involved in it.
I am entirely independent and this helps me to fulfill my function as the chief executive of the trade association. My role is to protect and promote the industry and all of the members of the ASTL.
What is the history of the ASTL?
The members of the ASTL came together in 2007 in what was the culmination of many meetings and conversations that had taken place in previous years. There was recognition of the advantages of a trade association to enable members to join together and act as a collective with a single voice in respect of many of the issues that lender members face.
The ASTL was formally launched in early 2008 and as part of the formation we established membership rules and a code of conduct which all members subscribe to. It is understandable that the banks and financial institutions who support the short term lending industry are pleased to see this introduction of self-regulation and the imposition of rules to ensure good behavior and transparency of dealings. The fact that there is a trade association to monitor these things gives comfort and confidence to the financiers and also the brokers and the borrowers who deal with the short term lenders.
What does it aim to do?
The objectives of the ASTL are set out on our website. These are all aimed at protecting members and promoting their interests.
What do you see in the future for bridging loans
For many years there has been an understandable market opportunity and place for bridging loans. Regularly buyers need to finance for the short term whilst they put in place their plans and expectations in order to make it possible to obtain a long term mortgage. To facilitate these circumstances there is a role for the short term lending industry which is prepared to take a risk and act quickly and decisively to enable buyers of property to achieve their objectives. We all understand the current circumstances and the lack of liquidity in the financial and capital markets. Naturally this is squeezing transactions and limiting volumes and depressing prices. Against this backdrop the UK Government and the Treasury and the Bank of England and the FSA are all playing their part in overcoming these difficulties and as the market breaks free of the current restrictions then of course there will again be an return of the demand and supply of bridging loans.
Where do you think interest rates and the housing/mortgage market will go in 2009?
No one can be sure what will happen to interest rates and the housing and mortgage market in the early to near future (by the end of 2009). It is Adrian Bloomfield’s personal view that the housing market will begin to recover, at least in the number of transactions, even if it will take some while yet for prices to rise materially.
We have all seen how big an influence on property values is the availability of mortgages. There are many who believe that a residential property is worth the amount that a prospective buyer can borrow against it. With this in mind it is essential that every effort is made to kick start the mortgage market so that the underlying demand for people to buy and sell property and move and create households begins to be satisfied again.
Who do you think is to blame for the recent problems in the mortgage market? Did providers, brokers and consumers get the support they needed?
It seems to me likely that the economy will be in the doldrums for some time and inflation will be low and in those circumstances it is difficult to see that there will be any substantial rises in interest rates.
The question of who is to blame for the recent problems is fascinating. Everyone is entitled to their view. Standing back and trying to see the big picture it occurs to me that everyone involved shared the same optimistic views and became less concerned about risk.
With the benefit of hindsight we can see now that it was inevitable that property prices could not go up forever, the capital markets were not limitless. Demand would sooner or later be satisfied and we would reach saturation point in the number of buy to let investors, tenants, homeowners, mortgage arrangers.
In addition we can now see that there would have to be a slowdown in the provision of all goods and services and that continual unrestrained growth was impossible to maintain. We all have to get used to the new circumstances and this is a time for the most skilled and most professional operators to not only survive but prosper.
If there was one aspect of the current market you could improve, what would it be?
I am asked if there is one aspect of the current market that I could improve what would it be. I would take innovative action and introduce legislation to limit the rate of interest that credit card companies could charge good borrowers for fairly small consumer credit facilities. It is my perception that to get the economy moving the man in the street needs a real boost and it is all well and good reducing VAT a little and seeing the Bank of England reducing interest rates to almost zero but this has only modest effect if credit card companies are charging high interest rates, and even increasing them at this time
Where do you think the market will be in 2012?
Finally I am asked when do I think the market will recover and where do I think it will be in 2012? I do not hold the view that the market will recover to what it was as I think it has changed and we are looking at a new market. This is my expectation at least for the long period ahead whilst people in control remember this recession and the causes of it. History has taught us that in the very long run the lessons will be forgotten and we are likely to do it all over again.
I expect the economy to improve a little in 2012 and I expect there to be more demand for credit and that includes mortgages. I expect by then that the worst of the credit losses will have surfaced and been accounted for and the financial community will have come to the view that there are better times ahead and hence lending and sensible risk taking is worthwhile.
