ASTL writes to HM Treasury regarding Lockdown 3

The Association of Short Term Lenders (ASTL) has continued its ongoing dialogue with HM Treasury, with a letter proposing collaboration on any potential extension to the enforcement moratorium, following the latest national lockdown.

Within the letter, the ASTL says: “The health of the nation is paramount, and no member would knowingly seek to repossess a domestic residence where health concerns continue. With this in mind, we would like to repeat our assertion that a broad-brush approach to mortgage lending enforcement when it comes to measures such as this is ultimately detrimental to customer choice and access to finance.

“The initial moratorium came to an end in September and, while there have been no physical repossessions since, this has allowed for the progression of actions, where there has been legitimate cause, to a point where repossession might take place subject to the decisions of the court and when the wider health environment improves. Put simply, it has enabled the courts to make decisions on the correct course of action, based on the specific circumstances of an individual case. By enabling the machinery of the process to operate in this way, it has gone some way to allay the long-term liquidity concerns for some lenders and also mitigated against further logjams in the court system in the future.”

Vic Jannels, CEO of the ASTL, says: “The ASTL represents the interests of many of the short-term mortgage lenders in the United Kingdom, which have a collective loan book of more than £4.5bn and are responsible for annual lending of over £1bn. The bridging and development loans advanced by our members are a crucial source of finance for many thousands of SMEs and property developers, as well as private individuals and will be in even greater need following the end of CBILS and BBLS. With this in mind, we believe any extension to the moratorium will significantly slow down the recovery that all stakeholders are working towards.“

Jonathan Newman, senior partner at Brightstone Law and member of the ASTL Executive Committee, says: “As we have discussed previously with HM Treasury, short-term lenders are disproportionately impacted by the moratorium given the typical nature of their funding model and any return to a wholescale moratorium would significantly reduce the availability of finance when it is most needed as we emerge from the pandemic. We would very much welcome the opportunity of a further discussion on this matter.”