Churchbridge Capital scraps bridging loan broker fees and introduces cashback
The London broker will pass 10% of its lender procuration fee back to borrowers on standard bridging deals where it earns at least 1% commission.
Churchbridge Capital, a specialist finance broker based in London, has stopped charging borrowers its own broker fee on its core bridging loans. It has also started a cashback scheme that hands part of its lender commission back to customers.
The company said the change is meant to cut the cost of short-term property finance for property investors, landlords, developers and business owners.
Borrowers taking out standard bridging finance will get cashback worth 10% of the procuration fee Churchbridge earns from the lender. The offer covers standard bridging deals where the lender pays Churchbridge at least 1%, which the company said is the case for most of its arrangements. On larger deals where lender commission is negotiated down to 0.5% or 0.3%, the cashback may be smaller or not offered at all, but Churchbridge said it will still not charge its own broker fee.
As an example, the company pointed to a £1.1m bridging loan for a borrower in Bath. The borrower received £1,100 in cashback and did not pay a broker fee that would have been about £11,000 under Churchbridge's previous typical charge of 1%. Churchbridge said the loan completed in 12 days and relied on an existing valuation of the property rather than a new report.
George Wall, managing director of Churchbridge Capital, said borrowers had long accepted expensive broker fees as part of bridging finance. "We don't believe that should be the norm, and we've decided to do something about it," he said.
Churchbridge arranges bridging finance for auction purchases, refinancing, development projects and for borrowers raising money against property they already own. The broker partners with WSP Capital Limited and offers borrowers a choice of bridging lenders across the UK.
The company said the removal of its own fee does not cover other costs, so borrowers can still face charges such as lender arrangement fees, interest, valuations and legal work. It added that cashback depends on whether a deal is eligible and on the commission the lender pays.
