Long term potential
The famous quote “never had it so good” that former Prime Minister Harold Macmillan once said could be used for describing bridging finance 60 years on.
Recent competition among short-term finance providers means headline rates now start at below 0.6%, as lenders fight for the market share. The industry has never seen such sharp competition and rates realistically cannot sink much lower.
It’s not just the competitive rates that stand bridging borrowers in such good stead: lenders have matured and learnt during the industries rapid rise. Figures released show bridging lending grew last year by over 28% in real terms and this year the figures are likely to impress. Loan sizes also increased last year, the good thing was that the loan-to-value remained constant giving the borrower more protection. All these figures clearly show bridging is in a very strong position and the future is looking very positive indeed.
The most important factor for those clients looking to access capital when speed is of the essence is certainty of funds. The major high street banks can be so slow to react and assess cases – if they even have the appetite to lend in the first place. Bridging lenders have been very quick to notice this and have exploited the banks lethargic attitude to their benefit.
Consumers have benefited with a combination of attractive innovative products and vastly improved standards of customer service.
Help required?
If you would like to know more about bridging finance and how it could assist you please do contact one of our fully qualified advisers.
Borrowers turn to bridging
More and more borrowers are turning to bridging loans as mortgage companies tighten controls on borrowing. Figures just released for the last quarter show bridging increasing to homeowners by 27% on the previous quarter, these increases are likely to be down to tighter controls from high street banks and other traditional lenders.
Brokers up and down the country confirm they are also turning to bridging to assist clients in achieving their targets as high street lending becomes more difficult. One broker in Surrey said “Bridging finance is plugging a funding gap which has appeared”. “Borrowers are finding it more difficult to obtain loans from mainstream lenders who are implementing tougher affordability restrictions”.
Some 80% of brokers reported a significant increase in bridging loans in the last quarter and the trend seems to be continuing. Of the brokers surveyed the majority said this increase was due to the inability to secure clients a standard form of high street lending.
Of the brokers survey 100% of them stated they found bridging finance very easy to use and quick to complete. Asked if they would use bridging again in the future the majority said they would without hesitation. The Surrey broker said “We have used bridging in the past and now we are using it on a more regular basis”. “Clients in general are impressed with the efficiency and speed bridging offers”. “Good thing about bridging is we don’t need proof of income or trading histories as the focus of lending is on the property”.
Like too know more?
If you would like to know more about bridging finance and how it could assist you please do get in contact with us and we will be happy to help.
Bridging buy-to-let surge
There has been a substantial increase in buy-to-let activity as investors look to beat the April stamp duty increase deadline.
Bridging loan completions nationwide in this area of business have increase since Christmas by 42%. We here Fastest Bridging can confirm this trend is correct as we are showing an increase of 61%, plus we are striving to complete on several more deals before the deadline.
Buy-to-let activity in general has increased by 25% on a monthly basis since December. The 3% increase in stamp duty is set to take effect from 1st April as part of the Government’s attempt to curb the buy-to-let market. The idea behind the scheme is to free up more properties for the first-time buyer, it remains to be seen if this action will have the desired effect.
This type of business is when bridging “comes into its own”, a new mortgage application now will be far too late to complete on time. With a bridging loan there is still plenty of time as long as the case is “clean” with no hidden problems. A bridging loan can also help secure the deal at a far better price as the buyer is able to complete very quickly which is always attractive to the seller.
Benefits of Bridging for a buy-to-let
The benefits are numerous but the most popular ones are, speed of completing a deal which is normally no more than 10 days. The flexibility this type of loan offers is a major factor of use as well, for example the buyer has time to select the right mortgage deal to suit the long term needs. Costs of a bridging loan have reduced significantly over the last few years and no longer present major problems with the borrower.
Can we assist?
If you require assistance or want to know how a bridging loan could help you please do contact one of our fully experienced advisers.