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In these times of high interest rates, a bridging loan is a good option

Mike Collins Mortgage Expert and independent financial advisor, explains what Bridging Loans are and how they could be used in current times. Bridging loans offer interest-only loans. They are typically taken out for people who need funds quickly. It is basically a bridge that allows for credit to become available between incoming debt and existing credit.

If you are in need of a quick-term lifeline, it can help you purchase property directly or at auction, complete renovations, and do any other work that is needed.

Mike Collins Mortgage expert, an experienced financial planner, shared his 17-year experience. Homebuyers are losing two out of five property purchases due mortgage delays. It is crucial that they can move quickly – and they have the option to do that using a bridging loan.

“The simple answer to this question is that a loan bridging a gap is paid back in a short time, which allows the interest to be more easily managed and makes the loan more affordable. Below are some details about bridging lenders and the reasons they can be helpful in this current economic climate.

To find out more about how we can assist you with your Bridging Finance requirements, please click here to get in touch

Rates for Bridging Loan Interest
These can be fixed. Stability can be achieved if you can pay the agreed-upon repayments. Variable interest rates will change in accordance to the Bank of England Base Rate, which currently stands at 2.25% (Sept.2022).

The rate you pay will determine the amount of your monthly repayments.

Rates can vary depending upon what you want to use the loan for. Bridging loans on land or business bridging loan rates are generally more expensive than one for residential purchases.

Buyer demand for homes is very high. This increases the demand for bridging loans and delays in the purchasing process.

It is important that you realize that interest rates are charged on a monthly schedule when looking at them. This is because terms usually last only 9-12months.

Cash available quickly
Bridging loans, which are easier to arrange than secured or mortgage-type loans, are more efficient if time is of the essence.

Funds can often be released in just three days. Bridging loans are a great alternative to the competition.

It is quicker to arrange because the lending decision tends depend on your exit strategies. The strategy you have for paying the loan back at the end of the term.

Discover our Bridging Loan services.

If you have bad credit, it is possible to get one
Your credit score is an important factor in determining whether you are eligible for a loan. It can also affect the rate of interest or other fees you may have to pay.

Even if you have bad credit, it’s possible to get one. The lenders will tend to be more concerned with the property than your credit score when determining the rate.

There are no long checks because the loan is secured against assets of value.

Help to fix broken chains
Recent research found that 1/5 applicants needed a Bridging Loan because they were part a chain that was broken. This delayed their purchasing timeline and made it necessary to get a short-term loan to cover the gap.

Bridging loans could be a way to still make a sale. Currently, the average completion time takes four months.

The current rise in interest rates may lead to a fall in buyer demand. Bridging loans could also be affected by this drop. But loans like this could be lifelines to many buyers, property owners, and others.

Whatever bridging lender you choose make sure they’re a member the Financial Conduct Authority. This means that any complaints, especially when it concerns large sums of cash, can be handled according to FCA guidelines.


Source: News Anyway

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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.

To find out more about how we can assist you with your Bridging Finance requirements, please click here to get in touch

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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Six Ways To Use A Bridging Loan

A bridging loan can essentially be used for any legal purpose, however, they are usually used as part of a property transaction. As the name suggests, bridging finance is used to ‘bridge’ a gap in a person’s finances before an alternative source of funds becomes available, or before a longer-term finance option can be arranged.

Using an online bridging loan calculator is the best way to understand if your project is viable and what it would cost you if you were to take out bridging finance.

This article outlines the most common uses of a bridging loan, as well as some of its benefits.

Buy before you sell

The most common way a bridging loan is used by homeowners is to purchase their next home before selling their current one. This could be because their buyer pulled out last minute and they don’t want the property chain to break, or simply because their perfect home has come onto the market and they don’t want to miss it.

The bridging loan would be secured on your current property and used to purchase the new one. The bridging loan would then be repaid from the proceeds of the current property being sold later. As the maximum term for a bridging loan is usually 12, or 18 months, this will give you ample time to sell your property, even if it isn’t on the market when you take out the loan.

Buying a property at auction

Bridging loans are ideal for purchasing properties through an auction. Once a successful bid is made at an auction, the buyer has 28 days to complete the purchase which obtaining a mortgage within that timescale may be impossible.

As bridging finance can be arranged very quickly, as little as 48 hours in some circumstances, the loan can be used to purchase the property outright (sometimes with no deposit if you have other properties which can be used as additional security). The most common method of repayment in these circumstances is through re-financing (when you have arranged a mortgage, the money will be used to repay the bridging lender). Bridging finance can also be used if your intention is to purchase the property to renovate and sell on for a profit.

Renovate your home before selling

If you are planning to sell your home, but some renovations would significantly increase the value, bridging finance can be used to fund this.

The bridging loan would be secured on the property and then repaid through the proceeds when the property is sold.

Purchasing an unmortgageable property

Banks and building societies will deem some properties as ‘unmortgageable’ which means the property is unsuitable for mortgage lending. This could be for a variety of different reasons, but common reasons include the lack of a working kitchen/bathroom, it is above a commercial property or the lease is too short.

In these situations, the property is limited to cash buyers as those requiring a mortgage to purchase the property wouldn’t be able to do so. However, as a bridging loan can be secured on any type of property, one can be used to purchase the property and fund any repair works required to make the property mortgageable. The bridging loan would be repaid through re-financing when the mortgage is granted.

Inheritance tax and probate issues

Sometimes, when dealing with inheritance tax and other probate issues, large funds are required. This could be for paying tax and other bills, releasing charges on a property or even to pay off other beneficiaries. In these situations, property is usually sold to produce the lump sum required, however, there is often a time limit put on the sale and properties may be put into a forced sale position, an auction for example, meaning it’s likely that the best price won’t be achieved.

A bridging loan can be used to sort out any problems, provided there is a property for it to be secured against, and then repaid when the property is sold.

Repossession prevention

If a property of yours is due to be repossessed by a lender, a bridging loan could be used to pay off any debts secured against it, provided you have enough equity in this property, or another, for the loan to be secured against. This will enable you to regain control of the property and sell it on your own terms to be able to repay the loan, and avoid a forced sale situation where the property is unlikely to achieve its full value.

Benefits of using a bridging loan

There are multiple benefits to using bridging finance, some of which are listed below.

  • Fast to arrange — in some circumstances, the funds could be in your account within 48 hours. This is ideal for emergency situations, or times when you want to grab an opportunity.
  • No monthly repayments — with a bridging loan, the interest is added to the loan facility and repaid at the end of term with the capital, this means no monthly repayments are required.
  • Flexible lending criteria — as no monthly repayments are required, your income will not be assessed and most lenders won’t look at your credit history. As long as you have a viable exit strategy and you have sufficient security available, you should be able to qualify for a bridging loan.
  • Any property can be used as security — a bridging loan can be secured on any type property, including; houses, flats, bungalows, shops, commercial units, mixed-use properties, hotels, farms and also land and building plots. Bridging finance can also be secured on derelict properties, or those of a non-standard construction. You can also use multiple properties as security for one loan to lower the loan to value.

Source: Shout Out UK

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Bridging development loans up 22% in Q1

In Q1 2018, there was a 22% increase in in bridging development loans since the previous quarter, with members of the ASTL lending £386.1m worth of development loans, of which £242.2m were categorised as bridging.

This further highlights the crucial role of the short-term lending market in supporting the property development sector in the UK.

Terry Pritchard, director at Charterhouse, said: “There’s a lot of development bridging finance at the moment and a lot of planning applications.

“We’re still a nation looking to build. I’ve seen lots of application for bridging, mostly for new build. There’s lots of business, however it’s not all good quality.”

Chris Dawe, sales director at brokerage LDNfinance, said: “This is certainly a trend that we have seen. This is mainly linked to the reduction in mainstream buy-to-let and standard property investments due to lender criteria and tax changes.

“This has prompted the clients looking to invest in property to move their focus towards alternative investment property propositions which may involve reconfiguration, refurbishment or renovation.”

Property development bridging loans are a method of obtaining short-term finance in order to either secure a property or refurbish with the intention of adding value.

These development loans exclude what is generally termed “light refurbishment”, such as the addition or renovation of bathrooms, kitchens and conservatories as these generally do not require planning permission or extensive structural changes.

Harry Hodell, senior originator at Fiduciam, said: “There is a evidenced shortage of housing throughout the UK, so increase in development bridging loans comes as no surprise to Fiduciam.

“The market demand for competitive short term funding options, remain high and although improving, funders providing competitive bridge development products are some way off meeting the demand out there.

“We expect this figure to continue growing as SME’s become more accustomed to using alternative financiers and aware of the wide range of bespoke lending available to them.”

Benson Hersch, chief executive of the ASTL, said: “The role of small and medium building firms are seen as crucial in helping solve the housing crisis but access to finance still remains their toughest barrier to overcome.

“Whilst SME building firms continue to be locked out of mainstream channels, they will increasingly rely on different sources of finance such as short-term funding solutions. These alternative forms of finance are providing a solution and allowing small developers to play their part in housing delivery.”

Source: Mortgage Introducer

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The growing popularity of bridging loans for investors

In the 10 years since the global financial crash of 2008, banks have sought to limit their exposure to real estate risk and are increasingly constrained by EU-led regulation detailing the levels of risk they can hold on their books.

However, as banks have sought to manage their risk, reducing the amounts they lend to property investors, alternative and specialist lenders have risen up in their place to meet the needs of those looking to take advantage of the steady increase in property prices seen in the UK.

More and more, investors are turning to specialist finance lenders who face a competitive lending market as low interest rates remain in place.

This trend has only been exacerbated by Brexit as the ongoing uncertainty around Britain’s exit from the EU leaves borrowers, banks and new lenders without a clear picture of the next few years.

In light of this, bridging loans are increasingly popular as a short-term solution for investors and a way for high-net-worth individuals to see a return on capital.

Although the recent rise of bridging loans is associated with specialist lenders, particularly in the commercial space offering non-FCA regulated loans, the product originated as an option for property buyers to bridge a gap between exchanging contracts and completion of a sale where you needed to purchase a property in the interim but did not have the capital.

Banks would offer short-dated loans against the property being purchased while at the same time offer a second loan against the property you were selling pending the sale of it. However, more recently the loans, although still predominantly short term, refer to products that are designed to meet more complex borrower requirements across different sectors within property.

The model is a short-term specialist solution usually offered on a term of one to 12 months. Non-regulated bridging loans can be used for a variety of purposes but it is important that the lender can track the purpose of the same. Generally, the first charge lending will be used to refinance existing debt or to release capital to assist with a purchase of property. If a loan is used to purchase a property that is to be lived in by the buyer, it falls under the regulation of the Financial Conduct Authority.

“As banks have taken a back seat on property, investment space has been created in the market for specialist lenders”

It is possible, however, to lend on a second-charge basis on a family home providing it is and can be proven to be for business purposes. This could be to release monies to pay a company tax bill or to release cash towards purchasing a new buy-to-let property to add to an existing portfolio.

ActivTrades entered the bridging loan and specialist lending market this year using our own funds to offer unregulated loans of between £250,000 and £5m. The company offers loans across the UK from 0.49% a month with terms of up to 18 months, although other term loans may be considered on an exception basis.

As banks have taken a back seat on property, investment space has been created in the market for specialist lenders. Offering bridging loans has become a way for capital holders to see a return on their money while interest rates remain low following the global financial crash and the rebuilding of balance sheets. As such, the attraction of specialist lending is that it is not as expensive as the market perceives it to be.

Specialist lenders such as ActivTrades have opted to either lend money themselves and accept a lesser return or team up with a third-party funder such as a hedge fund. This second group of lenders must offer loans at a higher rate in order to cover the charge from their funder, which is likely to be around 7%, meaning they charge a higher interest of around 10% or 11% in order to make a return. For ActivTrades, which loans its own money, borrowers can expect rates as low as 6% per year.

However, this model is increasingly under pressure as the market becomes more competitive. Yet even with increasing competition between specialist lenders, the speed at which they can approve loans, even on multi-faceted financings, distinguishes them from traditional bank lenders.

Some broker specialist lenders such as ActivTrades are able to review the requirements for a loan and make a theoretical offer in as little as a two hours. In contrast, banks must run a more stringent approval process brought in after the global financial crash, while having to increase the capital they hold to meet any future potential commitments in line with new capital requirements.

Risky business

Of course, specialist lending still involves risk and as lenders continue to drive down prices, and we have seen the property market flatten out over the past year after a period of sustained growth, there is a concern that increased competition is leading to the rise of riskier loans. New entrants to the market are adopting more aggressive stances, taking on higher loan-to-value ratios, backed by challenger banks, hedge funds, family offices and investors. There is a fear that if an alternative lender were to collapse, third-party funders would withdraw their capital, leaving the market without liquidity.

We have also seen the emergence of peer-to-peer lending, which basically offers the consumer the opportunity to invest in property transactions with a specified sum of money with the attraction of securing a much higher return on their savings than they can get on deposit accounts. A downturn in the property market could create serious difficulties in this model.

Over the past 18 months, the rise of specialist lenders in the UK has been further spurred by Brexit. Lending has become cheaper as the Bank of England has kept interest rates low due to fears of a downturn after we leave the EU.

Meanwhile, the uncertainty has meant the main European high-street and clearing banks, as well as newer challenger banks, must make sure their balance sheets can cover any downturn. As a result, the number of specialist lenders entering the market has risen substantially in the past 12 months.

Furthermore, despite the fears of an instant market impact in the immediate aftermath of the vote, there is still active interest in buying and selling property in the UK as investors look for a home for their capital until there is clarity on what Brexit Britain will look like. If the most pessimistic predictions come true, households will be £1,200 worse off a year, the cost of importing goods will increase and many will see their job certainty reduce. All of this will affect the property market.

The retreat of the big banks in Europe over the past 10 years is unlikely to be reversed and many of them are considering moving their operations abroad and continuing to downsize their businesses in the UK. And while Brexit may exacerbate the recent downward trend of the property market, there are always those who will see opportunity before prices rise again.

It is a fact that the need for bridging and specialist lending flourishes in both a bull and a bear property market, but it would be likely to lead to overexposed lenders having their lines of credit reduced or even withdrawn, which would slim down the growing number of lenders. ActivTrades is perfectly poised as we are not reliant upon funding or lines of credit and, combined with the wealth of property lending experience, are here to stay.

Source: Property Week

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Guide to Bridging Loans

In the world of property development bridging loans are often an extremely useful method of obtaining short term finance in order to either secure a property or refurbish with the intention of adding value. Traditionally bridging loans can attract interest of up to 20% (or even higher) depending upon the type of security offered, type of project, size of the loan and the loan to value ratio (LTV). On the surface the interest rate may seem extremely high but the key is how this money is used and the return it creates.


The easiest way to show how bridging loans can assist with refurbishments, renovations and redevelopments is to give you an example.

Property acquired for £100,000 in cash

In this example a property is acquired for £100,000 with the idea of refurbishing, renovating or redeveloping. The investor takes out a £50,000 bridging loan with an interest rate of 20% (equating to 1.67% per month) for a period of 6 months. The idea is that the £50,000 investment used to fund refurbishments, renovations or redevelopment will add an additional £100,000 to the value of the property resulting in the net gain shown below:

Six monthly interest payments at 1.67% per month = £5010
Typical lender’s fee at 2% = £1000
Typical broker’s fee at 1% = £500

Therefore, at the end of the six-month period the £50,000 will be repaid having attracted interest charges of £5010 and additional charges of £1500. Depending upon the nature of the project there may also be additional legal charges.

However, in theory we now have a property worth £200,000 which cost:

Original purchase price £100,000
Bridging loan £50,000
Bridging loan interest plus expenses £6510

Total expenditure £156,510


It is now possible for the investor to take out a traditional long-term mortgage, at lower interest rates, on the new property value of £200,000. The funds raised on the higher value can be used to pay off the bridging loan where in simple terms a £56,510 investment has created £100,000 in enhanced property value.


All bridging loans will require some kind of security which is traditionally a property owned by the investor. This ensures that in the event of financial problems in the future the bridging loan can be paid off by disposing of the secured asset. As an investor is obliged to use one of their own/company assets as security against the bridging loan this ensures that they have the strongest incentive to fulfil their financial obligations.


As we touched on above, bridging loan charges can add a significant amount to any bridging finance and this is something that investors need to be aware of. In recent times we have seen challenges to the traditional bridging loan market in the shape of crowdfunding bridging loan operations which effectively link investors directly with borrowers. Some of the benefits of crowdfunding bridging loans include:

• Reduced additional expenses with specific focus on crowdfunding bridging loans in theory attracting increased volumes.
• Reduced operating expenses and third-party commissions have led to a fall in traditional bridging loan interest rates. In simple terms, crowdfunding reduces the layers of bureaucracy.
• More attractive repayment options with many crowdfunding deals offering early repayment with no additional charges.

Crowdfunding bridging loan companies still require the same level of security as more traditional bridging loan companies. However, they take full advantage of the online market thereby reducing their own overheads leading to reduced charges for customers. As we have seen with private loans, business loans and property development finance, crowdfunding is putting significant pressure on more traditional rates of interest.

Source: Property Forum

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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

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Bridging set for another boost – London Credit outlines why 2018 looks set to be another excellent year for the bridging finance sector

Bridging finance continues its rise as a truly effective funding option. Industry bodies have reported a record year in 2017 and the indicators show that this is set to continue this year, still playing a vital role in helping to fund property renovation and change of use. With the supply of rental property still in high demand, short-term finance has an ever-increasing role to play in easing the housing crisis and supplying businesses with much-needed funding to expand their premises.

The demand for bridging finance doesn’t seem to have been dampened by several legislative changes to the buy-to-let market: more stringent affordability tests, tax relief and stamp duty rules were all introduced last year, but the demand for bridging has remained strong.

Even the PRA rules, which mean that landlords with four or more buy-to-lets need to submit details of their existing mortgaged properties, haven’t dampened demand. Now that the new rules have had time to settle in, we’ve seen a steady stream of enquiries from portfolio landlords for blocks of flats for student accommodation and HMOs for young professionals. This is particularly important in major cities where rental accommodation is at a premium, as house purchase is still a pipedream for many, despite the stamp duty relief for first-time buyers in the Autumn Budget.

The purchase price of a property is a key factor in determining yield for a landlord and, depending on the amount of renovation needed, can help keep the costs down. As long as the property is rented out at the market rate for that area, higher yields could result.

Auctions remain a good way for investors to acquire property at a competitive price, often below market value, and 2017 was another positive year for auction sales. Landlords and developers are snapping up residential rental and commercial units, particularly when work is needed on the property for either refurbishment or change of use. At an auction, completion needs to happen quickly, often within 28 days, so bridging finance is the ideal way of making this happen.

It’s vital that developers get a fast turnaround, so they can start work on the property as soon as the funding is in place, allowing them to shorten the time it takes to get the property on the rental market. To exit the bridge, some of our clients refinance to a longer-term loan with a more traditional lender or sell the property at a profit.

In short, the bridging finance sector is in great shape, and despite legislative changes and Brexit uncertainty, it’s proved to be resilient to such factors. There is a range of lenders servicing a variety of funding types and loan sizes, with more alternative products on offer than we’ve seen for many years. Short-term finance offers a real alternative to mainstream funding sources and bridging remains one of the best ways to act quickly when opportunities arise. It looks set to remain just as popular in 2018.

Source: PR web

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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

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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