Marijana No Comments

London brokers increasing their amount of international bridging

Based on observations and conversations over the past year, there appears to have been an increase in the search for international funds coming through London brokers.

A growing number of London brokers it seems, are being asked to access money by borrowers keen to do one of three things: either purchase an international property, carry out work on a property based overseas or, increasingly, release money from a property based in continental Europe in order to spend on property or business in the UK. In each of these cases there is another property that is being leveraged on a short-term basis in order to satisfy a development or business need.

There could be a number of reasons for this uplift, but it increasingly seems to be the case that if you have an international property and can’t find funds abroad then you look to London as an international finance centre. For flexible, short-term funding, London is still the place to come, even despite Brexit.

What is interesting is that the people turning to London brokers for help are not even all UK nationals, they are a number of different nationalities all of whom have property on the continent that they need to leverage on a short-term basis.

It makes sense that international brokers like Enness and Knight Frank will be approached for this business as they have international connections so may be contacted in multiple jurisdictions, but the demand seems to be wider than this with a much wider range of brokers being approached. It is not exclusive to London brokers either, but the demand does seem to be predominantly in this region.

The key reason seems to be that short-term finance is not generally available across the continent, but as awareness grows of bridging finance and how useful it is, this is increasing demand. And the key place to realise this demand is in London and the UK.

There has also been an uplift in UK business people releasing capital from properties they may own abroad in order to capitalise on business opportunities here. Many UK business people, especially developers, will have unencumbered property abroad. They are now seeing the opportunity to leverage it for their business or for property development. It is this segment of the market that is showing the greatest potential. This fast turnaround of short-term money can really make a difference to businesses needing to invest, or even needing working capital.

It is an exciting market and what that looks set to increase throughout the year as awareness of the possibilities increase, not only in the UK but across Europe.

Source: Mortgage Introducer

Marijana No Comments

Bridging market grew by 15% in 2018

Members of the Association of Short-Term Lenders (ASTL) wrote more than £4bn of bridging loans in 2018, representing an increase of 14.8% on 2017.

Figures compiled by the ASTL’s auditors from its bridging lender members for the fourth quarter of last year show an increase in the value of loans completed, outstanding loan books and applications in 2018 from the year before.

Benson Hersch, chief executive of the ASTL, said: “Our latest data survey shows continued growth in the bridging sector, with the value of loans completed in 2018 up by nearly 15% on 2017, the value of applications growing by more than 13% and the value of outstanding loan books also higher than the previous year.

“These results show that, in an uncertain economic environment, our members are continuing to provide useful, flexible finance for a whole range of purposes, and they are doing so whilst maintaining a commitment to high standards of underwriting.

“This is very encouraging and indicates a sustainable sector that is built on robust foundations.”

During this period, the value of applications increased by 13.4% to nearly £21.5bn and total loan books increased by 3.6%.

The value of loans completed for the quarter ending 31 December 2018 increased by 13.5% on the previous quarter and the value of applications increased by 0.3%, although the value of outstanding loan books decreased by 7.1% during this period.

Source: Mortgage Introducer

Marijana No Comments

Bridging Loans – A source of quick capital

Sometimes, it can be difficult to get a regular loan, especially if you need capital fast. Traditional lenders and financial institutions have a lot of red tape involved in a loan process. Bridging loan cuts away the bottleneck and significantly reduces the time it takes to get much needed financing.

Bridging loan allows you to take advantage of opportunities without having to face the tedious loan application process adopted by most lenders.

In essence, bridging loan provides a way of obtaining short term financing for your project while working towards a more long term alternative. Bridging loans are invaluable especially when you need to purchase a property or equipment that would otherwise not be possible.

Even though bridging loans are commonly used to purchase property, this short term interest only loan can provide a breathing space for you to handle other projects while exploring other sources of funding.

Here are just a few reasons to use bridging loans

Short processing period

Property investors know that delay means losing out. As much as you wish it were possible, a property in the market won’t wait for you to raise the needed funds. There are lots of other investors with access to quick cash who will grab the property from under your nose. With bridging loan, you don’t have to wait for your mortgage to be approved while watching helplessly as a wealthy investor snaps up your dream property. Instead you can immediately raise the money for your new property and worry about selling off the old one later.

Even if you are not in the market for a property, you may need to acquire equipment for your business, or raise capital for raw materials. Bridging loan provides a short term solution for you to raise the needed cash to solve your business needs.

Bad credit financing

A lot of people are in a situation where they find it hard to obtain financing due to a poor credit score. Virtually every major lender will check your credit score before approving you for a loan. Simply missing one payment can plunge your credit score into the pits and even if you manage to result the bad credit issues, the bad record can still come back to haunt you. Thankfully, bridging loan offers a way for people with bad credit score to access the funding they need.

“One of the benefits of bridging loan is that bad credit will not be a barrier. These loans are quick to arrange, can be used for a variety of purposes and involves little or no credit check” says James of Bridging Loans UK.

Bad credit financing is typically used to clear a mortgage or buy a property while a mortgage plan is being worked out, or resolve other financial situations. However, you should have a clear exit strategy in mind before opting for bad credit financing.

Covering tax liabilities

Sometimes, you can be faced with sudden tax liabilities that can be difficult to factor into your current cash flow. In situations like this, you may find it hard to meet your financial obligations before the due date and this can cause unnecessary hardship for you or your business. Whether you are an individual or you run a business, unexpected tax can a hassle.

Bridging loan makes it easy for you to access the necessary funds to meet your tax bill. You receive short term financing to meet your financial obligations so that you can have the peace of mind to focus on other productive aspects of your life.

Debt forgiveness

If you have a property that is due to be repossessed due to inability to meet your financial obligations, a bridging loan can be used to pay off part of the debt and prevent repossession. It can also be used to pay off current lenders so that you will have a bit more time to resolve your situation. If you can stop the property from being repossessed, you retain control and can avoid a forced sale situation.

Bridging loan comes with a variety of repayment plans and manageable interest rates that would not affect the lifestyle of the borrower. It provides a useful source of quick cash that can help you meet any financial obligation in a timely manner. However, you have to be certain you can meet the loan conditions; this means planning your exit strategy, which could include conventional mortgage, buy to let or selling the property outright.

Source: ABC Money

Marijana No Comments

Bridging lending rises 10.7% in 2017

Bridging loan volumes rose 10.7% to £534.1m in 2017, according to the latest Bridging Trends data from mtf, Brightstar Financial, Enness, Positive Lending and SPF Short Term Finance.

£118.79m of bridging loans were completed by Bridging Trends contributors in the first quarter, before soaring to £150.7m in the second quarter – the highest level of loans transacted by contributors in a single quarter since Bridging Trends launched in 2015.

Volume cooled slightly in the second half of the year, dropping to £142.75m in Q3 and to £122.49m in Q4.

Regulated bridging loans increased market share on previous years to an average of 46% in 2017, compared to 44% in 2016 and 36.6% in 2015. Regulated bridging loan activity outperformed unregulated bridging loans for the first time in the first quarter of 2017.

Average loan-to-value levels dropped to 46.6% in 2017, down from 49% in 2016, while average monthly interest rates remained consistent throughout the year at 0.83%, dropping slightly from 0.85% in 2016 and 0.91% in 2015.

Average loan terms remained consistent in 2017 at 12 months- up from 11 months in 2016. Average completion times averaged 43 days in 2017, down from 45 days in 2016.

Mortgage delays were again the most popular reason for clients taking out a bridging loan in 2017- at 29% of all lending, although this was a reduction from 2016 when they accounted for 34% of activity.

Joshua Elash, director of mtf, commented: “The continued growth in lending volume in this sector, as reflected by the data reported by the contributing parties over the year, evidences the extent to which bridging finance is now increasingly a mainstream financial solution.

“It is interesting to note the what appears to be a direct correlation between the data reported and the macro-economic and regulatory changes which have impacted upon the market. We have, for example, in this annual reporting cycle, seen regulated bridging finance lending outstrip unregulated bridging finance for the first time. This follows on from the implementation of the mortgage credit directive and the consequential introduction of a new class of regulated “consumer” buy to let lending.

“Equally we are interested to note that again for the first time since reporting began, refurbishment to existing investment property was the most popular reason for borrowing during Q2 of last year. This follows on from increases in the stamp duty taxes payable on the acquisition of new buy-to-let properties and indicates a potential strategy shift amongst professional property investors towards value enhancement.

“As we look ahead to the year 2018 we are interested to see how these two trends in particular pan out.  In the interim and what remains certain is that bridging finance as a financial solution continues to go from strength to strength.”

Chris Whitney, Senior Broker at Enness Commercial, said: “Between stamp duty costs and stagnation in the London property market, it’s no wonder bridging finance for refurbishment is becoming increasingly popular. To avoid heft stamp duty charges, many more clients have been buying cheaper or outdated properties, and using second charge bridging finance to update them before refinancing onto a residential product. Likewise, we’ve seen numerous client looks to raise money against their properties who do not want to refinance altogether. As such, they’re using regulated bridges as second charges against their property, in order to keep their attractive first charge mortgage whilst securing the extra funds they need.

“Encouraging to see an overall increase in the total amount of bridging originated by the contributors to Bridging Trends, indicating a strong and resilient bridging sector that can survive what was a tough year with numerous obstacles to overcome, including MCD, PRA and tax changes for BTL/second properties and not least the long-drawn out Brexit negotiations.”

Kit Thompson, Director of Short Term Lending & Development at Brightstar, added: “Our business has seen a large increase in bridging for property refurbishment, with an increase in PDR schemes and change of use projects. In fact, with the exception of our FCA regulated bridging, which by contrast doesn’t generally involve refurbishment, almost all of our non-regulated bridging loans here at Brightstar involved some element of refurbishment, whether just light refurbs or those projects involving change of use and planning consent.”

Source: Financial Reporter

Marijana 1 Comment

Pensioners seeking payday loans almost double in two years

The number of people aged over 65 applying for payday loans has almost doubled in just two years, according to new research.

Figures from short-term credit broker CashLady revealed a 95 per cent increase between 2015 and 2017 in the number of pensioners turning to short-term financial help to top up their monthly pension.

The average monthly income of older people applying for these loans went up by £157, from £1,478 to £1,635, in the same period.

Despite a 10 per cent rise in monthly income, the research revealed the loan amount requested had increased by 26 per cent – suggesting pensioner income is struggling to keep pace with the rising cost of living.

In the space of two years, the average amount individuals applied for has increased by £80, from £302 in 2015 to £382 in 2017.

Chris Hackett, managing director of CashLady, said these figures suggest there were more and more older people living off their pensions yet struggling to make ends meet.

He said: “Inflation has been stuck at a high level for the last five years and while pensions have gone up, the shortfall between income and the cost of living is becoming increasingly apparent.

“The challenge for many of these applicants is our lenders will only approve loan applications if the person is in employment, which effectively rules out short-term loan options for those already retired.”

Earlier this month, research from the Pensions Policy Institute (PPI) revealed millions of people were almost completely reliant on a basic state pension of just £7,000 a year to pay their bills and live in retirement.

The report showed that for the poorest pensioners, £3 in every £4 of their income comes from the state pension.

The poorest pensioners are also seeing the lowest rise in income, since pension credit is set to increase by less than the state pension next April.

Paul Gibson, managing director of Granite Financial Planning, said he was surprised with the research results.

He said: “I don’t think most financial advisers clients would typically fall into this category and none of my retired clients have any borrowing requirement.

“Whilst the data may be accurate the annual percentage rate quoted on CashLady website of 1,272 per cent is quite staggering. It seems to be akin to putting petrol on a fire to try and put it out.

“If people are genuinely struggling I would hope there are better ways to cover this short-term debt, but high street banks’ lending criteria has now become so restricted they are not helping the problem as perhaps they should be.”

Source: FT Adviser

Marijana No Comments

Why small (but growing) is beautiful

2017 was a momentous year for bridging, with annual lending breaking through the £3bn figure for the first time. But before we get carried away, we need to bear in mind this is equivalent to only around one 19th of the residential mortgage market.

By its very nature, bridging is a niche lending market – although it has shown a remarkable ability to adapt and thrive, providing solutions to new market needs in recent years. For property refurbishment in particular, the options now available to developers are far more widespread and competitive.

Who in the mainstream market, would have thought a decade or so ago that bridging would have proved such a socially useful form of lending, enabling empty and neglected property to be brought back into use, and supporting entrepreneurship?

Yet here we are, and I am excited about where the future might lead us.

Gone are the days when the only awareness that people had of bridging finance was in managing the mismatch of timing in the sale and acquisition of two disparate assets.

Now, there is a growing recognition that short-term finance can bridge not just a timing gap, but other gaps as well – the risk appetite gap, for example (especially as far as big banks are concerned following the global financial crisis).

Occasionally, though, I hear rumblings of concern that the bridging market is growing too fast, and risks stoking problems rather than solving them. I also hear concern about the fact that too few intermediaries operate across boundaries – brokering both short term and long term borrowing solutions for their clients.

On the first point, I see little evidence of difficulty. If anything, short-term lenders are more acutely risk aware than their long term counterparts, as the impact will hit them sooner and harder if their customer cannot repay as planned.

As long as sensible due diligence is conducted and the client has a clear exit route, if the demand is there it makes sense to meet it.

As for the second point, I have a degree of sympathy. There are still only a relatively small number of brokers who engage with bridging, with few mainstream brokers considering this as an option – although this number is growing. Holistic advice, and access to the widest possible range of solutions, must always make sense from the client perspective.

One of the benefits of being part of a growing market is the increasing likelihood of forming part of the suite of options on offer. I’m sure it is only a matter of time until more brokers realise it makes sense to look at all options and this in turn will lead to the further growth of the bridging market

As we look ahead, there will be an increasingly fuzzy boundary between products, yet an increasingly clear expectation on the part of clients that their advisers will have all available options at their fingertips. It’s clear that bridging has now earned its place among those options – and that can only be a good thing.

Source: Mortgage Introducer

Marijana No Comments

A look back at the short term lending market for 2017

2017 was preceded by a long spell of huge growth and this year is no different, but it hasn’t been without a few bumps in the road. The sector suffered a short period where business levels dipped following the referendum, and again after the rate rise, but quickly bounced back on both occasions demonstrating its resilience and ability to adapt.

There have been many new entrants to the market, with a particular focus on the heavy refurb and development markets; this is largely down to the extension of permitted development rights. The rise in refurbishment lending could also be indicative of an increase in desire to improve existing properties rather than move, coupled with the lowest mortgage approval rate on new homes for over a year. Another reason for growth could be that mortgage delays continue to be the leading reason for the use of short term finance.

Overall, there has been a lot of liquidity in the market with fierce competition which has driven rates down even further. The lowest available rate is currently 0.44% pm and the most competitive we’ve ever seen.

Short Term Lending product of the year

This year, Interbay, part of One Savings Bank launched in to the short term lending market. Brightstar were fortunate enough to be selected to trial their product with a headline rate of 0.44% pm. This offers non-regulated clients the ability to benefit from the UK’s most competitive short term lending rates, starting at just 5.28% PA for loans up to 55% LTV.

The product can also be used for property requiring light refurbishment.

The LTV brackets are 0.44% up to 55% LTV, 0.54% up to 65% LTV, and 0.64% up to 75% LTV.

All LTV brackets carry a 2% fee with no exit fee or ERC.

Source: Financial Reporter

Marijana No Comments

Rise of 115% in numbers applying for a short-term loan to pay their mortgage of rent

THE number of people in the UK turning to short-term loans to cover their rent or mortgage has more than doubled, according to new statistics.

In the past two years the number of people applying for short-term credit who said they needed help paying for their accommodation increased by 115 per cent.

New data from FCA authorised credit broker CashLady found the total number of people applying for loans has also nearly doubled since 2015, with a 93 per cent increase in volume.

As well as the number of loan applications rising, the average loan amount requested by those struggling in the UK has increased by 45 per cent from £224 in 2015 to £325 this year. The statistics from CashLady come just weeks after the Financial Conduct Authority revealed that one in six people in the UK (17 per cent) would struggle to pay their mortgage or rent if it increased by just £50.

Earlier this month, the Bank of England’s Monetary Policy Committee announced it would increase interest rates for the first time in ten years — from 0.25 per cent to 0.5 per cent.

Figures also revealed that NHS workers still top the list of employees who most require emergency financial help.

They are followed by supermarket staff from Tesco, Asda and Sainsbury’s. Struggling members of the armed forces also make up the top five workforces requesting loans.

Managing director of CashLady, Chris Hackett, said being able to keep a roof over your head is “a basic human right.”

He added: “These figures, uncomfortable as they are, lay bare the state of the nation as people are struggling to cover their rent or mortgage payments.

“Wages for some of our most valuable members of society are just not high enough for them to manage basic living costs and they are regularly being forced to seek out short-term financial help.

“Housing expenditure is the largest monthly expense for our customers and they should be able to comfortably afford this before turning to emergency finance.

“We act as a broker for short term credit to help our customers find financial assistance from FCA authorised credit providers instead of seeking out illegal or potentially dangerous alternatives.”

The CashLady figures have been released after Chancellor Philip Hammond was accused of leaving ‘ordinary’ Brits out of yesterday’s budget, by failing to mention a wage boost for public sector workers, despite claiming to “support our key public services.”

Source: The National

Marijana No Comments

Short-term lending industry shows increased consumer confidence

The highly controversial high-cost short-term (HCST) credit industry has seen a huge increase in consumer confidence in the UK.

The high cost loans, otherwise known as payday loans used for emergency purposes, have always been subject to huge criticism from the press and MPs. In particular, payday giant Wonga was once accused of “usury” for facilitating loans with an APR of over 6,000 per cent. However, following new regulation, the industry has seen a dramatic change in transparency and consumer confidence.

The introduction of FCA

The Financial Conduct Authority took over as the main regulator for consumer credit in 2014, officially launching in January 2015.

One of its first changes was to ensure that all lenders and brokers trading in the payday sector were fully authorised and fit to carry out regulated activity. Companies were granted “interim permission” whilst applications were being processed, with most companies taking around 12 months to become fully authorised – such as QuickQuid, Peachy and Uncle Buck.

The rigorous process managed to remove more than half of the companies offering high-cost short-term loans from the industry – allowing only the most compliant to survive.

The role of authorisation has significantly de-powered the role of brokers in the industry, who until this point had been regularly capturing data and re-selling it multiple times for profit. Prior to 2015, it was unclear for many consumers which website was a lender or broker, hence many applicants would fall victim to their details being sent to hundreds of companies, bombarded by text messages and phone calls and in several cases, upfront fees being taken out as a cover for “admin fees”.

This led to the payday industry receiving over 10,000 complaints between Jan and March 2014. But since the introduction of FCA regulation, the process of brokers selling data has diminished significantly.

The price cap

In addition, the FCA the introduced a price cap for the payday industry to limit the amount that lenders could charge. This capped daily interest at 0.8 per cent, equal to £24 per £100 borrowing and meaning that customers would never repay double the amount they asked to borrow. This resulted in several more companies leaving the industry, deeming that the margins were no longer “commercially viable”. A price cap on default charges was also established, limited to a one-off fee of £15.

One function of the price cap was to encourage new competitors in the market to compete over other factors such as even lower rates, flexible product offerings and customer service.

Checks

All lenders were required by the new FCA regulation to carry out full credit and affordability checks prior to funding a loan. This indicates that lenders have to prove that a borrower can afford to repay without falling into financial difficulty. The role of underwriting was somewhat loose previous to FCA – with several loans granted by lenders in an attempt to increase profits by extending loans and triggering late fees. In fact, several large lenders were fined millions of pounds for failing to demonstrate adequate checks. Wonga was fined over £200m in October 2014 and QuickQuid fined £1.4m in November 2015.

However, with strict checks now a requirement, there is an emphasis on only giving loans to those that can afford it. The downside is that less and less people will be approved for loans as lenders become more restrictive. Wonga notoriously cut its number of approved loans from one million in 2014 to 550,000 in 2015.

Transparency through comparison websites

In an attempt to increase transparency of prices, all lenders are now required by the FCA to include a link to a comparison website clearly on the website homepage. This should allow the user to see clear comparison tables and compare the rates of that lender against other competitors. Leading comparison sites in this industry include Money.co.uk, All The Lenders and Quiddi Compare.

How consumer confidence has increased

The role of regulation has significantly increased consumer confidence for those looking for a high cost loan.

As we approach the three-year anniversary of the FCA’s regulation in the industry, we see that applicants have a much better idea of what lenders charge, without fear of very high costs or their personal details being sent to numerous companies and fees being taken out for no reason.

This has been emphasised by the number of people searching for payday related products on Google and the topic being mentioned considerably less in the press.

In addition, a recent review by the FCA of its price cap indicated that it was “happy” with how it was being conducted and how there were overall significantly less complaints in the industry. The price cap and regulation for the high-cost short-term credit industry will not be reviewed again until 2020.

Source: Real Business

Marijana No Comments

Chain-break: How you can STILL buy if your sale falls through

PICTURE the scene. You’re moving home, and you’re in a chain. That is to say, you’re selling to someone who’s selling to someone else. The deal is days away from exchange, and then you get the phone call. The estate agent telling you that your buyer is having to withdraw from the transaction.

Your first thought is that you’re going to lose the dream home that you’re currently trying to buy.

Your second thought is the amount of money you’ve racked up so far on solicitor’s costs and surveyor’s fees that you’re about to lose.

Believe it or not, on average currently one in three chain-based transactions fall through in the UK, and although the reasons why vary, the consequences are normally always stressful and expensive.

So, if this happens to you, what are the options available if you still need to move and don’t want to miss out on the property that you’re aiming to buy?

Firstly, it may be possible to keep the property that you were going to sell, remortgage it to release enough equity to make your onward purchase, and then keep it and let it out.

This course of action makes you a landlord, albeit an accidental one.

It’s is a common way to deal with such a problem, particularly in areas where there is high demand for rental housing.

If this route appeals, you’ll need to get professional mortgage advice to ensure that the numbers stack up, and that you have the correct mortgage in place for both properties.

It’s not a cheap solution, as you also need to bear in mind that if you’re keeping your existing home and letting it out, then you’ll pay an additional 3% of Stamp Duty and Land Tax on the property that you’re buying.

You’ll also need to ensure that you understand the ramifications of the additional income tax you’ll pay on any rental income on the property you’re letting out.

However, for some people whose individual circumstances mean that they need to move quickly, this can be a reasonable solution, although one which requires significant research to ensure that you understand fully what you’re letting yourself in for and how much it’s going to cost you, both in the long term and the short term.

Another option is to take out a bridging loan.

This is typically a short-term funding option, used to ‘bridge’ the gap between when you need money to purchase a property, and when you’ll receive funds on the property that you’re selling.

A bridging loan can be a very useful solution to help facilitate a transaction that otherwise wouldn’t be able to move forward, for example if a chain falls apart.

However, there are a couple of things that are important to consider.

Bridging finance is basically a short-term loan offered at a high rate of interest, which can make it an expensive option.

Secondly, you need to be really confident that your sale is going to go through, because the money is advanced to you so that you can make your onward purchase on the basis that you’ll be paying it back in full within a very short timescale, usually a couple of weeks.

A typical bridging loan is based on 1% interest per month on the total amount that you’ve borrowed, and you’ll need to have an exit plan, in other words evidence how you’re going to repay the loan and when, in order to be considered for this particular type of finance.

The other thing to be aware of is that bridging loans aren’t regulated the same way that normal, mainstream mortgages are.

So, if this is an option you’re considering it’s really important that you receive expert, professional advice from a broker who can review a range of bridging loan products for you, to ensure that the bridging finance company are reputable and that you fully understand all the fees you may be charged and how the interest on the amount you’re borrowing is being calculated.

As Brian Murphy, Head of Lending for Mortgage Advice Bureau whose best buy mortgages for home movers have been released today explains, “Being involved in a transaction where a chain breaks down can be exceptionally stressful, but there are options available to help you progress your move.

“If you decide to let out your existing property and need to remortgage to release equity in order to help fund your onward purchase, it’s likely that you’ll need a specific Let to Buy mortgage, which is a slightly different product to a typical Buy To Let mortgage.

“If you’re going to raise bridging finance, it’s essential that you get professional advice, as you’ll need permission from your existing mortgage lender to do so.

Either way, it’s crucial that you are totally comfortable with the financial implications of whatever course of action you decide, and that you can afford all the fees and repayments and additional Stamp Duty, if it’s due, before you continue.”

A third option is to sell your existing home to an investor who specialises in buying properties quickly, in order to free up your cash so that you can proceed with your sale.

Typically, if you’re using this kind of service, you’ll be offered a price that is well below the market value for your property (or BMV as its known in the property industry) for example probably only 75% or 80% of what it’s worth, but they will facilitate a transaction quickly.

Historically, this has meant that this route has really only been used by those who are desperate as a last resort, due to the amount of equity lost as a result of such a transaction.

However, there is now a welcome alternative to the typical BMV investor model.

Nested, who are a new entrant to the market, offer to guarantee up to 97% of the market value, with the additional upside that a further amount is payable to the seller if Nested are able to sell the property at or above the agreed valuation.

If the property sells at under the value guaranteed, Nested make up the shortfall, not the seller.

Nested was launched in January 2017, and don’t class themselves as a BMV investor, rather an ‘ethical estate agent who is able to guarantee that they will sell your home’.

So far, the company has successfully sold over £400million of property, enabling their clients to sell their current home quickly in order to buy another, or assist those who have been in a failed chain to complete their purchase when they’ve lost a buyer.

The cost for using the Nested service is a fixed fee of 1.5% of the selling price of the property, which is very similar to what many normal estate agents would charge, although of course the crucial difference is that Nested guarantee to sell the property once the valuation has been agreed.

There is an additional fee of up to 1.5% if the guaranteed valuation is exceeded when Nested sell the property.

The service currently operates within the M25 and covers Greater London, however the company are rolling out nationally early in 2018.

So, if you receive that phone call from the agent telling you that your buyer has pulled out, don’t panic.

There are options available. Yes, it’s awful when life throws a curve-ball like this but, by taking appropriate professional advice and researching your options thoroughly, it’s still very possible to proceed with buying that home you’ve set your heart on.  Just take a deep breath and, as the saying goes, keep calm and carry on.

Source: Express