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UK bridging sector set for post-Covid rebound

The UK bridging sector is in rude health, and confidence is high for 2022, according to a recent survey of brokers undertaken by Glenhawk, with 84% of respondents saying that they expect to write more bridging business in 2022 than in 2021. Reflecting the defensive appeal of real estate as an asset class and the favorable sectoral headwinds experienced last year, just 14% of brokers wrote less bridging business in 2021 than 2020.

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Despite 74% of brokers believing that Permitted Development will enable them to arrange more bridging cases, borrowers have been slow to embrace the 2021 changes to PD rights, reflecting a lack of understanding in the market as to the opportunity it presents. Nearly three quarters of brokers said that either less than 25% of their landlord clients (43%), or none (26%), have asked for them to arrange bridging finance relating to PD. Over half of respondents (54%) cited a lack of suitable properties as the main obstacle for this lack of demand, followed by fluctuating valuations and access to finance.

The survey also reveals that lenders are continuing to exercise caution, with 60% of brokers citing the placement of higher Loan to Value cases as their biggest challenge, followed by securing finance for foreign nationals (37%). 

Nick Hilton, Glenhawk Managing Director, commented: “Building on what was a remarkably robust 2021, buoyed by changing consumer behaviour, supportive government stimulus and a low interest rate environment, expectations are high for 2022. These findings align with the exceptionally high levels of enquiries we have generated so far this year, with the market opportunity as Covid-19 fades into the distance set to grow considerably this year.

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“At the same time, there remain challenges, noticeably the continued need for lenders to simplify and increase transparency for the borrower process, whilst more highly leveraged schemes will remain out of favour, especially if recent global events take on a more urgent focus. Furthermore, despite the welcome changes to Permitted Development last year and optimism about its potential, huge swathes of the market remain unaware of the opportunity, so there is a signficant education piece to be undertaken in the coming months.”

Other findings include:

  • There is significant capacity amongst brokers for more business, with just 14% saying that they had turned away more bridging cases in the last 12 months compared with 57% who could place more
  • For borrowers and brokers new to the market, how interest is calculated / repayment terms is the most confusing area (49%), followed by the legal process (39%) and the application process (32%).

The findings resulted from a series of webinars hosted for brokers by Glenhawk, the fast-growing UK challenger lender, in February 2022.

By Nathan Spencer

Source: Built Environment Networking

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Bridging Sector Set for Strong Performance in 2022

Two years of economic turbulence have forced the UK public and its business community to rethink its priorities. Not to mention, the lending options available when looking to secure cost-effective funding for a wide variety of projects.

Interestingly, one area of the UK’s lending market that has flourished throughout the pandemic is the bridging finance sector. Bridging loans specialists and lenders collectively enjoyed an extremely robust 2021, and the same is now predicted for the year ahead in 2022.

According to the latest figures from West One, the lender’s bridging division saw its most prosperous year on record in 2021. Gross bridging loan completions were up a full 32% (reaching £485 million) during the first six months of last year, increasing further to an impressive 52% by November.

All of which could pave the way for further record-breaking performance in 2022, so states the lender.

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Housing Sector Remains a Key Driver

The UK’s housing market remains a hive of activity, as property prices continue to skyrocket and mortgage rates remain close to record lows. In addition, new and established developers across the country are setting their sights on increasingly ambitious property conversions, transforming commercial and semi-commercial properties into homes.

Experts believe that demand for larger bridging loans – sums in excess of £1 million – will grow considerably over the course of the next 12 months.

Others have cited growing demand for affordable finance for property renovations as improvements as a key driver for the bridging sector. With more people spending more time at home than ever before, more money is being spent on making our homes pleasant and functional places to reside, and this is where bridging finance has proved ever popular as a funding option.

The materials and labour shortages that blighted the sector in 2021 are showing signs of improvement. This could subsequently lead to a major spike in property development and renovation activity, as it becomes increasingly affordable to plan and complete ambitious projects.

House Prices Set to Soften

While there may be no signs of the UK housing bubble bursting in the near future, the gradual softening of house prices is inevitable at some stage. Something that could motivate more buy-to-let landlords to expand or diversify their investment portfolios, as the property investment cost becomes less prohibitive.

This is also a sector where bridging finance has proved particularly popular over recent years. Bridging finance enables new and established landlords to purchase properties at auction for less than their true market values, conduct the necessary improvements and let them out to generate profits.

Or perhaps, sell the properties on to generate significant short-term revenues.

In all instances, the bridging sector will continue to cater to those looking for fast-access finance at competitive rates. In particular, borrowers with adverse credit or a history of financial issues are likely to find the bridging loan sector far more flexible and accommodating than the traditional High Street approach.

BY LINDSEY BENSON

Source: News Anyway

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Bridging applications reached record high in Q3

Bridging applications reached a record high of £7.72bn in the quarter ending September 2021, an increase of 4.9% on the previous quarter, according to the latest ASTL data.

While the value of completions in Q3 2021 dropped by 6.1% on Q2, completions still totalled £1.0bn in the quarter, meaning that the value of loan books now stands at more than £5bn for the first time.

The data shows that the value of loan books was £5.07bn at the end of September, representing an increase of 6.8% on the previous quarter and a jump of 11.1% on the same quarter last year.

According to the data, average loan-to-values (LTVs) continued to hold at 59.8% in Q2 and the value of loans in default fell for the third consecutive quarter, showing a decrease of 4.1% over Q1 and a fall of 3.6% on the same quarter last year.

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Vic Jannels, chief executive of the ASTL, said: “The Q3 2021 lending figures continue to paint a picture of a market that is enjoying strong growth whilst maintaining a robust approach to risk, with applications increasing and loan books topping £5bn for the first time, at the same time as defaults falling for the third consecutive quarter and LTVs remaining stable.

“From experience, we know that more brokers are engaging with the bridging market and analysis of our data shows growth across different elements of short term lending, including development finance and second charge bridging.

“It’s clear that bridging is becoming more established as an invaluable piece of a broker’s toolbox for a range of purposes. We would always recommend that ASTL lenders continue to represent a benchmark of quality and customer focus, for those brokers.”

By Jake Carter

Source: Mortgage Introducer

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Bridging lending hits over £190m in third quarter

Bridging lending has returned to the highest levels seen since 2018, according to data from more than a dozen packagers in the sector.

Gross lending by contributors to the survey hit £190.24m in the third quarter of this year, which is the highest volume recorded since Q4 2018.

Lending was up by 30% on £146.52m the previous quarter and by 65% on £115.52m in Q3 2020.

Contributors attributed the growth to strong housing market activity ahead of the tapering down of the stamp duty holiday.

It represents the highest volume seen since £201.57m in the final quarter of 2018.

The research combines bridging loan completions from several specialist finance packagers.

For the second consecutive quarter the purchase of an investment property was the most popular use for a bridging loan, at 28% of total contributor transactions – up from 24% in Q2.

A traditional chain break was the second most popular use at 13%, a drop from 20% in Q2.

Meanwhile, demand for auction finance surged from 4% in Q2 to 11% in Q3.

First charge bridging loan transactions remained unchanged from the previous quarter, accounting for 90% of total market volume in Q3.

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Regulated bridging loans transacted by contributors decreased market share for the fifth consecutive quarter – falling to 37.7%, from 41.6% in Q2.

The average LTV jumped to 60.2%, up from 54.9% LTV in Q2 – this is the highest average LTV ever recorded since Bridging Trends launched in 2015. This illustrates that borrowers are maximising liquidity opportunities and taking advantage of low rates to leverage more than before.

Demand for higher LTV products was also a sentiment reflected in data provided by Knowledge Bank, which reported the top criteria search made by bridging finance brokers on their system in Q3 was “maximum LTV”.

The average monthly interest rate in Q3 2021 was 0.72%, down from 0.79% in Q2, highlighting the large levels of liquidity in a continually competitive space.

The average term of a bridging loan in Q3 fell from 12 months to 11. Bridging loan processing times returned to Q1’s record high of 53 days, up from 47 days in the previous quarter.

Stephen Burns says: “The most exciting part to read is ‘returns to’ when referring to activity levels.

“It shows the industry was affected by the disruption the Coronavirus pandemic put the country through, but more so, how it has pulled back quickly, and we are now firing on all cylinders.”

Dale Jannels says: “These figures show that bridging finance is now a better understood product for many brokers and they have much more confidence in recommending this solution to their customers.

“The stamp duty holiday has helped bridging finance to be more widely accepted by the mainstream industry as a need to meet speed demands, but investors with the intention to renovate have also been at the forefront of recent requests.”

Chris Whitney says: “Bridging Trends is a great concept and is fantastic at letting the industry know where the key indicators are heading and over the years, we have seen how micro and macro factors, such as Brexit, have impacted upon us.

“However, with the news that contributor gross bridging loans are over £190m it makes me wonder how big this market really is in its entirety.

“LTVs are up with borrowers possibly taking advantage of increasingly cheaper money in the light of reports that mortgage rates in general are heading upwards imminently.

“However, with continuing competition and even more new entrants in the short-term lending space, it will be interesting to see how that pans out with so many lenders looking to increase market share in a seemingly very liquid environment.

“However, at 60% LTV I think we are still seeing prudent levels of borrowing by people and responsible lending from the funders.

“I was not surprised to see processing times up.

“With increased volumes I think we have seen things take longer, with many lenders struggling to recruit good underwriters and valuers stretched to the limit.

“With the highest use of funds being for investment purchase I think it really shows how much confidence people have in UK real estate.”

Chris Oatway says: “It surprises me that the average LTV is at record high levels at just 60%.

“In general, we have seen considerable demand for higher leverage deals at 70% to 75% LTV, where clients keep as much equity in their back pockets for future investments.”

By Leah Milner

Source: Mortgage Finance Gazette

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Bridging market boom offers opportunities to all brokers

The bridging market has had a really positive 2021 so far. Just like the rest of the housing market, the stamp duty holiday has played a part, but it would be wrong to think activity is going to drop off sharply now the first holiday deadline has passed.

A recent study by Shawbrook Bank polled advisers on which areas of the market were most likely to grow in the second half of the year, with bridging taking top spot having won the votes of more than a quarter (26%) of advisers, ahead of semi-commercial and buy-to-let.

There’s evidently a real expectation amongst advisers that the appetite from investors, who like to take advantage of bridging loans in order to secure those additions to their portfolio quickly, is not going to drop any time soon and is in fact likely to grow.

This market growth presents a real opportunity for everyone in the adviser space, from those specialists who focus on short-term finance to those individuals or firms who perhaps handle only a case or two a year.

Cashing in on competition

Lenders are well aware of the levels of demand from advisers and their clients for quality bridging products. And in a bid to stand out from the crowd, they are taking a fresh look at their product propositions, trying to identify ways to make those products even more attractive to would-be borrowers.

In recent weeks we’ve seen not only new entrants to the market, promising to do things slightly differently, but also a host of rate revisions with some lenders even unveiling their lowest ever rates.

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It’s pretty clear there is real momentum within the bridging market at the moment, with borrowers the ones to benefit from the ongoing battle between lenders who are cutting rates and attempting to innovate regarding their product design.

Taking a personal approach

One area that has been particularly heartening for me has been the way that lenders are approaching cases which are a little out of the ordinary.

It’s one thing to find finance for a vanilla deal, a simple transaction where the client and the property being borrowed against fall comfortably within the criteria of any lender.

Yet recently we have seen a fair few cases which have been anything but vanilla, and not only have we been able to find lenders willing to consider the cases, but they have completed incredibly quickly too.

There is not only a healthy level of competition across the bridging sector as a whole but also plenty of lenders who are willing to take a more personal approach by going through all of the details of an individual case to assess just how happy they may be to take it on.

Finding the right deal

However, finding the right deal for your clients is not always straightforward when bridging is an area of the market you only deal with on an occasional basis.

If you have maybe one or two bridging clients a quarter, or even each year, then it’s simply not realistic to expect to be on top of the latest price and criteria developments, which can mean you don’t follow up on those client enquiries.

It doesn’t have to be that way though. By partnering with a specialist, who you are confident will treat the client with the same level of professionalism that mainstream mortgage advisers pride themselves on, you can ensure that not only the client receives the best possible advice, but also strengthen the relationship you enjoy with that client, boosting the chances of them remaining on your books for the long term.

By Liam Hughes

Source: Mortgage Introducer

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Bridging loan completions rise as lockdown restrictions ease: ASTL

Bridging loan completions jumped by more than a fifth to £1.1bn in the second quarter of the year reflecting the easing of lockdown restrictions, says the Association of Short-Term Lenders.

Short-term lending lifted by 23.3% compared to the previous three months, driven by rising completions and fewer defaults.

Bridging loan books reflect the increase in completions and now stand at over £4.7bn, the ASTL’s audited data reports.

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Loan applications in the quarter slipped by 1.7% to £7.36bn, compared to the previous three months, but for the year to the end of June were still 26.9% higher than applications in the year to the end of June 2020.

Average loan-to-value ratios showed a small increase since the March 2021 quarter and now stand at 59.8%.

The association says the value of loans fell by 7.6% compared to the first three months of the year, with the number of repossessions was also down in the second quarter, “suggesting the continued easing of coronavirus restrictions is having a positive effect”.

ASTL chief executive Vic Jannels says: “The second quarter 2021 lending figures are pleasing for a number of reasons.

“Not only is the market continuing to grow and show signs of ongoing recovery as we emerge from the pandemic, but the increase in completions also represents improving conversion rates, which is good news for brokers, lenders and customers.

“The falling value of loans in default and number of repossessions also reflect the quality of lending and shows that the market is continuing to grow in a sustainable way and enhance its ever-improving reputation.”

By Roger Baird

Source: Mortgage Finance Gazette

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Bridging loan market steady at £146.5m in second quarter

The bridging loan market has remained stable in the second quarter, rising to £146.5m from £144.5m in the first quarter, with first charge loans making up the majority of lending.

According to quarterly publication Bridging Trends, first charge bridging loan applications made up 90 per cent of market volume, up 12.2 percentage points from the prior quarter.

The report said this was partially motivated by investors and landlords seeking taking advantage of the stamp duty holiday.

The most common reason for using bridging loans was funding a purchase of an investment property, accounting for just under a quarter of contributor transactions, slightly up from Q1.

Traditional chain break was the second most popular use of bridging finance at 20 per cent of transactions, roughly in line with previous quarter.

Regulated refinance dropped to five per cent of contributor transactions, from 13 per cent in the prior quarter.

Regulated bridging loans fell in the second quarter, going from 47.7 per cent to 41.6 per cent.

The report noted that average monthly interest rates marginally increased in Q2 to 0.79 per cent, up from 0.74 per cent in the previous quarter.

Average bridging terms were 12 months with no quarterly change.

The average loan to value levels fell slightly from 55.2 per cent to 54.9 per cent, which the report said implied borrowers were not “overstretching themselves”.

The time taken to process a loan application also fell, with average completion times pegged at 47 days, down from 53 days in the first quarter. This was the lowest recorded timescale for completions since the second quarter of 2019.

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Gareth Lewis said: “As purchases would have been at the top of people’s minds due to the stamp duty saving, it’s no surprise to see that first charge lending has significantly increased its share of transactional volumes.

“It will be interesting to see if this percentage decreases in the coming months as consumers look to raise finance out of existing properties to fund further property acquisitions or businesses.”

Chris Whitney added: “It looks like we have reached quite a stable platform over the last two quarters. Any previous pandemic worries seem to have been put to one side with the stamp duty holiday deadline creating a frenzy of activity. The higher level of investment purchases shows confidence in the UK property market is strong.

“I am slightly surprised that lending volumes weren’t higher. The market certainly felt very busy as we struggled to get valuers out in a timely manner due to volumes and many a solicitor was having to burn the midnight oil to keep up with demand.”

Stephen Watts said it was encouraging to see completion times had shortened since the last quarter as it suggested lenders were streamlining their processes to include remote valuations.

He added: “Some lenders are now offering AVMs up to 75 per cent loan to value (LTV) in some circumstances and with the ability for asset managers to benefit from modern technology and carry out virtual client meetings, more loan applications are benefitting from these time saving factors.”

By Anna Sagar

Source: Mortgage Solutions

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Stamp duty holiday fuels bridging activity

Landlords and buyers rushing to complete before the stamp duty holiday started tapering off helped stabilise the bridging market in the second quarter of 2021, according to the latest Bridging Trends data.

Funding an investment purchase was the most popular use of bridging finance whilst the number of first charge bridging loans increased as buyers rushed to complete purchases.

The bridging market held steady in the second quarter at £146.52m, up on the previous quarter (£144.51m), contributors reported. However, regulated bridging loans transacted by contributors dipped in Q2 – falling from 47.7% to 41.6%.

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The average completion time on a bridging loan application in the second quarter reduced to 47 days, from a record 53 days in the first quarter. This is the lowest figure recorded since Q2 2019 (44 days).

Chris Whitney said: “It looks like we have reached quite a stable platform over the last two quarters. Any previous pandemic worries seem to have been put to one side with the stamp duty holiday deadline creating a frenzy of activity.

“The higher level of investment purchases shows confidence in the UK property market is strong.

“I am slightly surprised that lending volumes weren’t higher. The market certainly felt very busy as we struggled to get valuers out in a timely manner due to volumes and many a solicitor was having to burn the midnight oil to keep up with demand.

“Nice to see the time it takes to draw a loan heading in the right direction albeit was that again stamp duty deadline linked? It will be interesting to see where that is at in the next quarter.”

Matthew Corker added: “We’ve seen a dramatic rise in searches across our bridging section throughout this quarter. ‘Regulated bridging’ has consistently appeared as one of the most searched terms on our system throughout 2021, holding the top spot in April, May and June, likely due to buyers wanting to secure their onward purchase before the end of the stamp duty holiday.

“Interestingly, we’ve also seen a general rise in search numbers in more traditional bridging categories, suggesting that the usual summer lull may not be as pronounced this year.”

Gareth Lewis concluded: “As purchases would have been at the top of people’s minds due to the stamp duty saving, it’s no surprise to see that first-charge lending has significantly increased its share of transactional volumes.

“It will be interesting to see if this percentage decreases in the coming months as consumers look to raise finance out of existing properties to fund further property acquisitions or businesses.”

Source: Mortgage Introducer

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What Can Bridging Loans Be Used For?

Bridging Loan Uses

Sometimes you might need to access money quickly to buy a property and you cannot wait for the lengthy process of a mortgage application or a house sale, so you look for alternative finance options. One solution could be to borrow money from someone you know but if that is not an option, the next consideration is usually to apply for a Bridging Loan.

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What is a Bridging Loan?

A Bridging Loan is a short-term finance loan that can be used for a number of different reasons. It is commonly used to buy a property while an existing property is in the process of being sold but will not go through in time for the money to be available. It could also be used when someone buys a house at auction and they do not have the time to get a mortgage as they need to pay the seller quickly.

Another reason someone might choose to apply for a bridging loan is if they want to pay for urgent renovation work while they wait for a remortgage application to go through. Bridging Loans are frequently used by Property Investors but people who are not investors can also use it if they are in a situation that requires quick finance.

Types of Bridging Loans

There are two types of Bridging Loan:

Closed Bridging Loans

Closed Bridging Loans have a fixed date for the loan to be repaid. Typically, this will be used if you have exchanged contracts and are waiting for your property sale to complete. It may be that there has been a delay that means your mortgage loan is not ready yet. With this type of bridging loan, the lender will want to know exactly how you are going to repay the loan, for example, through sale of your property.

Open Bridging Loans

With an Open Bridging Loan there is no set date for repayment but most lenders would require it to be paid within a year, as it is only ever intended to be a short term finance solution. When you take out a bridging loan, you do not have to have a specific exit plan, such as the sale of a property.

Bridging Loans will usually have higher interest rates that standard loans, due to the quick solution that they provide. They are often referred to as gap financing because they are filling the gap until another finance option is available.

Who can use Bridging Loans?

Bridging Loans can be used by individuals or by businesses, provided that they meet the required criteria. Some Bridging Loans will require the applicant to have some type of collateral as part of the loan agreement, such as property.

How Businesses use Bridging Loans

Businesses often use Bridging Loans for reasons other than buying commercial property via a Commercial Bridging Loan. They sometimes use it to cover costs such as paying tax bills while waiting for another finance solution. Some business owners use a bridging loan to purchase another business in a takeover, or they might cover the costs of a development project.

Bridge Loans for Property

In some situations, a homebuyer may need to take out a bridging loan to pay for their new property while they wait for their existing property sale to go through. If there is a delay in the sale, to avoid their purchase falling through, they can arrange bridging finance to ensure it goes through.

There are fairly strict lending criteria for this type of bridging loan use and the applicant would have to have excellent credit ratings as well as a low debt-to-income ratio. Another part of the criteria that lenders usually require is that the bridge loan is only up to 80% of the combined value of the two properties, which means that the applicant must have a large amount of equity in their property.

If the applicant does have a bridging loan approved in this type of scenario, the mortgages for the two houses are rolled together.

Property investors and Bridging Loans

Many property investors use Bridging Loans to enable them to build up their property portfolio. When they are buying property at an auction, a quick way to finance the purchase is through a bridging loan but they also use bridging finance to buy properties on the market too. Often, property investors will need property purchases to go through as quickly as possible so that they can get tenants into rented property.

Another way that property investors sometimes use Bridging Loans is if they want to buy a property and refurb it and then sell it on for a higher value than they bought it for. This process is called flipping and a short-term loan is ideal as once the property is purchased, they will spend a few months on the refurbishment and then quickly sell the property on.

Experienced property investors are usually quite likely to get approved for a bridging loan because they will have accumulated a lot of collateral in their property portfolio.

How does a Bridging Loan work?

The way that a bridging loan usually works is that a ‘charge’ is placed on your property. This ‘charge’ is a legal agreement that determines which lenders would get paid first if you were to miss payments on your loan and fall into arrears. If you own your property, then the bridging loan would be your first charge but if you still had a mortgage on your property, the loan would be a second charge.

If you are unable to make the payments on your bridging loan, your property could be sold to pay the loan back to the lender.

Is a Bridging Loan expensive?

Generally, a bridging loan will cost more than a standard mortgage because it is a short-term arrangement and the lenders will want to make enough money from the short period of interest to make it profitable for them.

The fees are usually charged on a monthly basis, rather than an annual basis due to the loans usually only running for a number of months. A monthly fee might be somewhere between 0.5% and 1.5% per month, costing considerably more over a year than an average mortgage interest rate.

When you take out a bridging loan, you will also need to consider that there will be a set-up fee for the product, which will be around 2% of the loan, which can obviously end up being a very high amount if you are taking out a large bridging loan.

How much could I borrow with a Bridging Loan?

This varies massively depending on the applicant’s financial circumstances and amount of collateral. The criteria will also differ depending on the lender but a large number of lenders will only lend up to 75% loan-to-value of the applicant’s property. In certain circumstances, if the client has sufficient equity in other properties, then a 100% bridging finance can be provided.

If you are able to take out a first charge loan, because you have no outstanding mortgage on your property, you will usually be able to borrow more than if you are taking out a second charge loan.

Is a Bridging Loan the right option for me?

A bridging loan can be the ideal solution for many people but there are disadvantages to consider too. These are the main pros and cons to be aware of:

Pros and Cons of Bridging Loans

The main Pros of taking out a Bridging Loan include:

  • Fast access to money
  • Able to borrow a large sum of money
  • Protect property chains
  • Enable projects to go-ahead which otherwise wouldn’t
  • Flexible

The main Cons of Bridging Loans are:

  • The interest rates are usually high
  • You will usually pay a large fee for the set-up of the loan
  • By securing the loan against your property, your property is at risk

When you are deciding whether a Bridging Loan is the right option for your circumstances, you should review all of the different options that are available. For example, if you are buying a new property before your existing property sells, you might be able to take out a Buy-to-Let mortgage instead.

However, if you are looking for an option that enables you to have access to money straight away, either to purchase a property, pay tax bills or pay for property renovations, then a bridging loan may be a better option.

Many property investors and property developers use Bridging Loans as a way to get started and then once they have made enough capital, they can stop using Bridging Loans to avoid paying the higher interest rates that typically come with this type of finance solution.

It is a good idea to get financial advice from an expert before you consider taking out any type of financial product. At Commercial Finance Network, as the UK’s leading Bridging Finance Broker, we can provide free expert guidance and advice on Bridging Loans and can help you to find the right type of finance to suit your needs. As a truly independent Bridging Finance Broker, we also have access to all of the UK’s Bridging Finance Lenders, so we can most certainly secure you the best deal and rates available in the market.

If you are interested in any our Bridging Finance services or you want to know how our services could potentially assist in moving your project forward to the next step, speak with one of our Specialist Bridging Brokers today on 03303 112 646 or else request a callback via our Quick Enquiry form below.

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90% of brokers believe bridge-to-let can assist BTL clients

An estimated 90% of brokers believe that bridge-to-let can help overcome concerns about bridging finance for buy-to-let (BTL) clients, according a poll conducted in partnership between Castle Trust Bank and Knowledge Bank.

Brokers discussed the benefits of bridging as a way of helping buy-to-let clients access new opportunities, but more than a quarter (28%) said their clients had concerns about short-term finance.

However, participants were almost unanimous in their agreement that bridge-to-let offered a way to overcome client concerns.

Brokers also agreed that buy-to-let is a growing market, with 64% saying that they have seen an increase in BTL and holiday let enquiries in the last three months.

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Rob Oliver said: “Bridging finance often enables investors to access opportunities that they wouldn’t be able to fund with a mortgage at the outset.

“But some clients are hesitant when it comes to short term lending as they worry about the uncertainty and unknown costs if they are unable to secure a suitable exit in their anticipated timeframe.

“Bridge-to-let tackles these concerns head on, with a pre-agreed exit onto a buy-to-let mortgage, including the price, at the outset.

“It’s one application process that offers speed, efficiency, budget planning and peace of mind, so no wonder 90% of brokers agree it’s a great way to beat client concerns.”

Matthew Corker added: “There’s strong demand from property investors at the moment, and many are looking at more specialist types of investment, such as HMOs, holiday lets and multi-units, which offer the potential for greater returns.

“Fortunately, there are lots of innovative options, like bridge-to-let, which enable investors to make the most of new opportunities, whilst also managing their own risk.”

By Jake Carter

Source: SFI

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