The ASTL 2014 conference was held on Tuesday the 16th at Painters’ Hall in the City of London. It was attended by 140 members of the bridging industry, 20 percent more than last year.

The speaker lineup was conceived to prepare lenders, brokers and service providers in the industry for the opportunities and challenges the industry faces. It addressed the concerns of regulated lenders on the implications of the MMR since it came into effect on April this year and consisted of Lynda Blackwell from the FCA mortgage policy division, Andrew Fyfe, fraud expert office at the City of London Police, Robert Sinclair of the Association of Mortgage Intermediaries and Susan Emmett, researcher at Savills. There was also a panel of industry professionals who debated issues like regulation avoidance, Scotland's independence and Britain leaving the EU as challenges in the near future.

The atmosphere was a mix of jubilation for the industry's success and confusion over the impending regulation. B&C sensed many of the guests were having difficulties hiding their unease about the way the new rules will be applied. Regulation was indeed the overarching theme.

Lynda Blackwell, Manager of Mortgage Policy at FCA said that bridging finance is often more accessible than the mainstream market post-MMR. As many borrowers are now facing difficulty, the pressures on mainstream lenders have also increased, chasing a market half the size it was before the crash.

Lynda added that bridging finance has an important part to play because of speed and flexibility. The regulator is concerned that bridging is being used in place of a mortgage because of tougher regulations in the mainstream market. As such, she said it was important consumers are getting bridging finance for the right reasons, that they fully understand the implications and costs, and they have clear exit strategies. She also said standards in bridging had improved remarkably over the past ten years. B&C will elaborate on this in the coming days.

Andrew Fyfe, Detective Chief Inspector with Economic Crime Directorate, City of London Police, addressed different types of fraud revealing that altogether they cost the United Kingdom £52 billon each year. He presented the mechanisms of mortgage fraud, money laundering and insider crime in financial institutions, citing a fraud of over £1billion at one organisation this year alone.

Robert Sinclair, CEO of the Association of Mortgage Intermediaries, looked at the implications of the European Mortgage Directive on first and second charge lending. He predicted base rate rises next year will stop the current pricing wars but the industry will absorb some of that cost. He accused the FCA and the Government of being “mad” and “a mess”.

Susan Emmett, a director in the residential research team at Savills, forecast that base rate could rise to 2.5% by 2017 and had house price growth at 25% over the same period. Savills interestingly predicted that the London market will have lower house price inflation than the rest of the South, as people are looking for more affordable housing.

Benson Hersch, CEO of ASTL said that “it was a hugely successful day with a very high turnout.” On the state of the market, he said, “The residential market will continue to prosper and the constraints of the MMR and the forthcoming EU Mortgage Credit Directive will need to be dealt with as ASTL members continue to be at the forefront of responsible lending. In the latest quarterly figures from ASTL members, the value of bridging loans increased by 92% compared to the same quarter last year while business confidence remains high. This certainly augurs well for both the industry and consumers.”

Said Michael White from Boutique Capital: “The emphasis on regulation and coming political changes are all highly relevant. There's still some degree of uncertainty as to what's going to happen next and I think that was touched on by a number of speakers, which I think was appropriate as well. As ever, the issue of far-reaching regulation is something that causes everyone some concern but I think the approach by members to look at better educational approaches to bridging finance for instance and the balance between various groups such as the hosts of this conference and others I think make the industry a good place for the next couple of years. The final point, I'd say, is that looking at the charts from Savills at the end, that underpins everybody's overriding expectation because at least you can look forward into a market where security is key and as long as they're reasonably correct we know that we are looking at something positive.”