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Bridging sector grows in Q3

The UK’s bridging sector continued its healthy growth of 2017 with another strong quarter’s performance, yielding a new high of £4.7bn in the year to Q3, West One’s Bridging Index showed.

The latest edition of the quarterly report revealed that gross annualised lending increased from £4.3bn in June to exceed 2016’s pre-EU Referendum high of £4.4bn.

The bridging sector has recovered from the slump in the Q3 of 2016 that followed the referendum result.

Marie Grundy, sales director of West One, said: “2017 has proven to be a strong year for bridging finance, with a clear return to form after the post-Referendum turbulence this time last year.

“Seeing further robust new business performance in a quarter that includes the typically-quieter summer holiday period is very encouraging.

“The wider property and property finance markets have flattened against continued political uncertainty due to slow progress negotiating Brexit, and the prospect of interest base rate rises finally arriving.

“This new market high therefore reflects the underlying strength of bridging.

She added: “We believe there is still that slack in the market and expect that the bridging market will continue to this pattern of solid growth, despite some slowing in the housing market.

“With pockets of growth outside London and the South East, we anticipate seeing more of that growth regionally.”

Trends in the bridging market

The emergent trend in the first half of 2017 of smaller transaction sizes has continued through Q3.

Average loan sizes dipped under £600,000 compared to averages in excess of £900,000 at the same time last year.

There were less large transactions coming to market, reflecting the relatively depressed market for high-end properties with values over £1m, especially in London.

s performance figures from different sources pointed to more upbeat property markets in some regional hotspots such as the East Midlands or Greater Manchester, it seems property investors are focusing on deals in those regions, with typically smaller ticket sizes.

The regional picture

Between actual residential property and property finance data, and forward-looking expectations data, varying patterns emerge.

Nationwide and RICS found the wider South East of England has also become more subdued in price growth, with a markedly negative outlook.

But UK Finance’s regional mortgage data showed mortgage lending in the London region at 10% more than that of Q3 2016.

Data for house prices identify both East and West Midlands as hotspots for annual price growth, alongside the South West, where supply is highly constrained.

The wider South East region is still showing growth, albeit at a slowing rate.

Savills research identified Midlands locations like Birmingham City, Leicester-Nottingham and Northampton and pockets in Scotland like central Glasgow and the Galashiels area of Edinburgh commuter hinterland.

With central Manchester also shining a light for the North West of England, this indicates the opportunities that investors are starting to exploit, where they know the local market.

Taking forward-looking sentiment data into account, other regions came to the fore, suggesting further scope for agile investors to grasp emerging opportunities.

September’s RICS residential market survey of members pointed to likely buoyancy in the North West, Scotland and Wales, with positive Q3 sentiment across a range of measures from price expectations to new enquiries and listings. This suggested positive market conditions will continue in the East Midlands and South West.

Bridging interest rates

Interest rates in Q3 recovered slightly from Q2’s low of 0.96%, returning to just above 1% per month.

With Bank of England base rate changes widely expected for some months ahead of the 2nd November 0.25% announcement, it is likely that the market had already begun to factor this shift in.

The report predicted a further rise in bridging rates during Q4.

Danny Waters, chief executive of Enra Group, said: “The bridging sector has performed well during Q3, despite the backdrop of concern around the progress of Brexit negotiations, and economic indicators pointing to both a slower economy and to the interest rate rise that ultimately came in November.

“Whatever happens next, the industry must continue to adapt to conditions, and provide the diverse and flexible funding options that property professionals need, so they can take advantage of the changing, regional landscape that we are seeing develop.”

Source: Mortgage Introducer

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Short Term Loans Solutions in the UK

If you have to pay unexpected expenses urgently, you may consider using short term loans, often referred to as payday loans or payroll deductible loans in UK. These are quick and effective punctual solutions. At the same time, if they are not used with care, they can cause more financial problems. If you think that a short term loan may be useful for you, you should learn as much about the subject as possible and evaluate its advantages and disadvantages before making an application. Use this guide to make the right decision as a borrower.

With short term loans, you can get cash quickly. This is to your advantage. You will have a sufficient amount of money to solve the financial emergency that you are experiencing. These loans are fairly easy to obtain as well. Most lenders have flexible qualification criteria and some do not even perform credit checks. When you borrow the money, you will have to leave a cheque on the loan amount plus interest and fees with the lender. The lender will cash it on your next payday. This way, you will pay off your debt automatically. It is possible to negotiate an extension of the repayment term, but you will continue to pay interest and other charges may apply as well. As a result, the loan will become more expensive and harder to repay. You will find that short term loans are some of the most expensive lines of credit available to consumers and UK-based companies. They, mostly, use payday UK login.

The APR (annual fee) which shows the total cost of the loan can be several hundred percent. The interest rates are high and so are the fees charged by the lenders. If you use a loan of $ 100, for example, and you have to pay it in two weeks, you will have to pay $ 120 to the lender. If you do the calculations, you will find that the APR on this loan is 426%. This is higher than the APR in traditional personal loans. The main disadvantage of short term loans is its high cost. If you find it difficult to pay what you owe, you can ask for more money or extend the term of the loan, but this can only make you into more debt. Eventually, you may end up in a debt trap that is hard to leave. Short term loans are not suitable to use when you do not have enough income to pay your expenses.

If you use them to fill the gaps in your budget, you will have even lower disposable income over the next month. They can be useful only as punctual solutions when financial emergencies arise. If you have to pay an unexpected medical bill or to buy a new refrigerator, you can use such a loan with confidence. You’ll have to manage on a smaller budget over the next month, but the situation will return to normal after that.

Source: Feast Magazine

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ASTL members up lending by 39% year-on-year

Association of Short Term Lenders firms (ASTL) increased the value of bridging lending by 38.9% in the third quarter of 2017 compared to the same quarter in 2016.

However lending saw a small fall of 2.7% from the second quarter of this year.

Benson Hersch (pictured), chief executive of the ASTL, said: “The figures from our members show that the bridging finance industry is in excellent shape.

“It shows that the industry has remained resilient despite the threat of Brexit and low growth in the economy.

“The figures also demonstrate that bridging loans remain an excellent alternative where traditional financing is not immediately available for customers.

“The bridging sector therefore continues to provide a vital role in the economy by offering customers access to the capital they need in a responsible and sustainable way.”

The value of their loan books stand at £3.5bn after rising by 27.7% from the end of Q3 2016 to Q3 2017.

Source: Mortgage Introducer

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Are Short-Term Loans Cheaper Than Overdraft Fees?

There’s been a lot of news recently about overdraft fees — the fees charged by banks to their account holders after an account dips below a £0 balance, meaning the account holder has a loan balance, even if small, from the bank.

Earlier this year, The Telegraph published its “worst offender” index, listing banks that charged the highest overdraft fees for their customers.

Santander was one of the top offenders, with an unarranged overdraft fee of £6 per day capped at £95 per month. On arranged overdrafts of up to £2,000, Santander charged daily fees of one pound per day; rising to £3 per day for overdrafts of £3,000 and above.

Other banks were similarly expensive. Borrowing money on overdraft from Halifax could result in charges of up to £3 per day, according to the July 2017 article. Unarranged overdrafts incurred a whopping £5 per day fee, capped at a maximum of £100 in overdraft fees per month.

RBS and NatWest also charged heavy unarranged overdraft fees, with an £8 per day fee limited to a total of £80 per month.

With as much as £100 in monthly overdraft fees from many bank accounts, it’s been suggested that borrowing money through short-term loans could be a more affordable option for people in need of quick access to cash.

The numbers seem to agree. An August 2017 article in The Guardian calculated that many of the most widely used bank accounts in the UK charged APR rates of up to 52%, making them more expensive — in certain cases, depending on borrowing habits — than payday loans.

Banks, to their credit, appear to be changing their overdraft fee structures in an attempt to make borrowing less expensive for customers. However, many have admitted that as much as 10% of account holders could end up paying more for overdrafts under the new fees.

Despite public warnings about short-term loans, it turns out that overdrafts — even if used rarely and responsibly — could be a far bigger cost for many British bank account holders.

For example, a loan of £300 over 3 months from a short-term loan provider such as Mr Lender, results in a total repayable of £444.00 (£300 capital and £144.00 interest*) at an interest rate of 0.8% per day on outstanding capital.

The same amount borrowed via an unarranged overdraft could result in £300 in fees through a high street bank using many of the fee structures listed above.

Public perception of borrowing money — and the true costs of borrowing money — isn’t always in sync with financial reality. For years, borrowing from the bank has been viewed as a safe, cheap way to access finance; borrowing from a short-term lender has been viewed as the opposite.

The reality, however, is that the best loan for your personal circumstances may not come from the source that you first think of. Study and compare interest rates and fees and you could find that borrowing money via short-term loans is more cost effective than using your bank overdraft.

Source: News Anyway