Partner Article

Bridging Finance Continues to Support Developers, Investors and Landlords

The current economic climate is for most people fairly bleak. Record-breaking inflation combined with several consecutive interest rate rises has taken a toll on household budgets across the country. People are struggling to heat the homes they live in, let alone stand any real chance of getting a foot on the UK property ladder.

But as is always the case, economic volatility plays directly into some people’s hands and pockets. Investors, property developers, landlords and high-net-worth individuals in general have been finding the pickings particularly rich as of late.

Over the next 6 to 12 months, the UK’s bridging finance sector is predicted to continue performing as strongly as ever. Fuelled by growing demand for fast-access, short-term funding at affordable rates, the combined value of the sector as a whole is tipped for major growth.

Just as long as the UK’s real estate sector remains near-inaccessible for most prospective buyers, the whole thing will continue to work in favour of borrowers and buyers who make the right moves.

Bridging Finance for Developers

For example, developers are flocking to the doors of bridging finance specialists to help them fund short-term property development and construction projects. The flexibility of bridging finance is a key draw, enabling developers to purchase all types of properties and land (with or without planning permission) at short notice. The funds required can be raised within a few working days, enabling developers to pick up bargain plots at short notice from sellers looking to offload their assets as quickly as possible.

Bridging finance can also be used to purchase the kinds of properties and developments that would not be considered eligible for any other type of residential or commercial mortgage.

Bridging Finance for Landlords

Residential properties are changing hands on the private rental market at a frantic pace. Some landlords are desperate to liquidate their assets for a raft of reasons, while others are working tirelessly to expand their portfolios to capitalise on record-high rent prices. Purchasing properties to let out to tenants is one of the most popular applications for bridging finance. A bridging loan can be used to purchase a BTL property outright for cash and to fund any renovations necessary to maximise subsequent rent yields. The facility can then be transitioned to a more conventional BTL mortgage at the end of the initial term, for flexible long-term repayment.

Bridging Finance for Investors

New and established property investors are taking advantage of the buoyant real estate market in a number of ways. Some are purchasing off-market properties at affordable rates, with the aim of selling them on in the future for capital gains. Others are investing in low-quality homes in need of repairs and renovations in order to conduct the necessary improvements and ‘flip’ them for fast profits. In both instances, bridging finance can be ideal for leveraging time-critical property purchase opportunities. For example, auction property purchases, or buying homes considered ’unmortgageable.

Bridging Finance for Individuals

Bridging finance continues to prove a popular choice for homeowners looking to simplify the relocation process. With a bridging loan, a borrower gains all the benefits and privileges of becoming a cash buyer. They can opt out of the traditional property chain entirely, and may be afforded significant discounts for purchasing their next home for cash. The bridging loan is then repaid when their previous property sells, providing all the time needed to ensure it fetches the best possible price.

For more information on any of the above or to discuss the benefits of bridging finance in more detail, contact a member of the team at UK Property Finance today.

This was posted in Bdaily's Members' News section by iCONQUER Ltd .