Fantastic news for people looking for a buy to let, buying at auction or, purchasing a property that might need a little TLC.
Bridging lending has always been a great solution for people looking to bridge the gap with funding a purchase or home improvements on a property that isn’t quite ready for a regular mortgage. With the coronavirus pandemic bringing most mortgage gears to a swift crunching stop, the apprehension around both bridging lenders and clients alike towards bridging loans were glaringly obvious however the figurative light at the end of the covid mortgage slump tunnel is shining through.
Bridging finance has returned to the highest levels in over three years according to a large number of specialist mortgage packagers and other industry experts who have recently taken part in some research. What does this mean? Better interest rates, more appealing products, higher loan to values and, more options!
These encouraging claims have been shared in Leah Milner’s latest press release for MortgageStrategy.co.uk in which she quotes the following:
‘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.’
Bridging finance can be an option in many different scenarios and with these new statistics, now is a better time than ever to speak to a financial advisor to see what your best options are. According to the research carried out, investment property purchases were the most popular use for a bridging loan, at 28% of total mortgage transactions by the firms involved in the research – up from 24% in Q2. A traditional chain break was the second most popular use at 13%, a drop from 20% in Q2 and demand for auction finance increased significantly from 4% in Q2 to 11% in Q3.
Most firms contributing to the research have concurred that this increase was most likely a result of the stamp duty holiday that was implemented as a result of the coronavirus pandemic last year. This initiative has allowed people to put some faith back in to property and financial advisors with the assurance that they wouldn’t be stung by large bills if anything went wrong.
A representative from Impact Specialist finance echoes this by saying “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.”