Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Market Financial Solutions Collapse Leads to Slower Lending Decisions

The collapse of Market Financial Solutions, alongside Century Capital, has led to slower decision-making and tighter checks in the specialist lending market. The changes have also resulted in greater appreciation for brokers and specialist advisers, according to a report by Mortgage Solutions.

Packagers and specialist advisers have increased their due diligence as clients now face longer waits and more scrutiny from lenders. The collapse of Market Financial Solutions drew worldwide attention and triggered a regulatory investigation, prompting the market to implement stricter governance, transparency, and reporting checks. These developments were highlighted in the Bridging & Development Lenders Association’s (BDLA’s) Bridging Market Survey.

Matt Tristram, co-founder of Loans Warehouse, noted that the failures have intensified audits across the specialist lending sector. He observed that clients are now required to provide more information, answer additional questions, and wait longer for decisions, even if their circumstances have not changed. Tristram also reported that credit decisions are taking longer, underwriters have less flexibility, and more questions are being asked throughout the process.

Data from the Finance & Leasing Association (FLA) showed a decline in second charge lending in May, the first monthly drop since April of the previous year. However, activity in June indicated a recovery from this period of caution.

Clayton Shipton, managing director of CLS Money, stated that despite the additional checks, his firm maintained average offer times of around 10-14 days. He said this benefits clients and lenders by reducing unnecessary delays and allowing more efficient processing of applications.

David Coleman, head of sales at Positive Lending, reported a higher appreciation from brokers for the gatekeeping role played by packagers and advisers. He emphasised that thorough due diligence helps deliver the right outcomes for brokers and their customers. Coleman also noted that ongoing due diligence can prevent unexpected delays or funding issues during transactions.

For UK letting agents and inventory clerks, these changes in the lending market may affect the speed and scrutiny of property transactions, with increased emphasis on transparency and due diligence.