Bridging loans are a popular funding source among property developers, inventors, and business owners. It is designed to provide quick access to cash so borrowers can meet emergency financial obligations or close deals on time. Property developers and investors commonly use it to complete the purchase or renovation of a property. However, you can use it for almost any legal purpose. With the increasing demand for bridging financing, the number of bridging loan providers has also increased. Now you can take such loans from p2p lending platforms or find the right lender through a broker.
If you are thinking of taking out a bridge loan, you should know the latest news and trends about this funding option. It will help you choose whether it is the right option for you.
Here we are going to describe the latest news and trends in the bridging industry. Stay with us to know more about these loans.
As a result of some recent events in the UK, such as the general election and emergency budget, most mortgage lenders have become nervous. These lenders are not providing funding to borrowers. Due to this, many residential and commercial are caught in a situation where they are not able to find quick mortgage loans or take advantage of such good deals. On the other hand, bridging loans typically provide financial solutions for buyers who are looking for quick funding. Over time, the loan market has grown, especially for individuals or businesses looking to buy properties at auction.
With the increasing demand for property loans, lenders have introduced some new products that match the needs of borrowers. Now you can also find lenders offering dual applications for both a long-term mortgage and a short-term bridging financing. Landlords can take out bridging loans that can cover 80% of the property purchase price of the property. With such loans, you can get more time to renovate a property and find tenants. This way, landlords can purchase a property at auction and use bridging finance to that property and make it able to get a traditional mortgage.
Since it is possible to take both a mortgage and a bridging loan from the same lender, it means changeover and timescales are approved in advance, and borrowers can have peace of mind that they will not be paying high-interest rates over the long term.
The current interest rate for fixed-rate mortgages is 6.66%, and that for a variable-rate mortgage is 6%. Some products do not have early repayment penalties, but you may pay higher interest. When compared with other property loan projects, we find that bridging loan products offer more security, flexibility, and ease.
Some bridging lenders have reduced interest rates and increased loan-to-value lending criteria to attract more customers, and we hope that other lenders will follow suit.
Bridging loan providers always try to offer more benefits to borrowers in one way or another. Some offer low interest rates, while others offer flexible eligibility criteria and tailor-made loans. If you choose a well-known and experienced lender or a reputable p2p lending platform, you can avail maximum benefits from bridging financing.
Other Bridging Loan News
Here we are providing you with some latest news in the bridging loan industry:
- Mathon finance has gone into administration, and PFK accountants will deal with all the creditors of the Glasgow-based bridging loan providers. Mathon finance put its focus on commercial properties and was hit by a fall in the value of business premises in the last two years. The company sold the remaining assets to Juniper Property Finance with the hope that jobs would be secured for employees. This news means the potential customers of this company will be glad to hear that other bridging loan providers are pleased to work with new customers.
- A large fraud of £1.5 million pounds has been prevented. Three men who approached Masthaven Bridging Finance for fraud have been arrested after the company became suspicious of their identity. Although men provided passports and utility bills, they proved counterfeits, and police were called.
Popular Trends In Bridging Loan Industry
Here are a few bridging loan trends that we have seen in 2022:
Increase in Demand Of Property Refurbishment
Property refurbishment has always been a popular way to increase property value before the sale. We have seen an increase in demand for refurbishment loans this year.
Due to the pandemic, the attitude of people about where they live has also changed. Besides this, the trend of remote working has also allowed people to spend more time at home. That is why they are looking to make their living areas more beautiful. Refurbishment is growing in all areas, from city centres to rural areas and suburbs.
Property Developers Demanding Extra Time
Supply Chain issues and material shortages are the primary causes of delays in development projects. It means that the capital is bound for a long time and stops them from taking advantage of future opportunities. Property developers can tackle such problems by taking more leverage at the outset.
Development exit bridging loan is a useful bridging product for property developers, and its demand is increasing continuously as more developers start realising that taking some time provides many benefits and proves cost-effective.
Cash Flow Becoming An Issue For Business Owners
Currently, we are seeing two common trends in business. Some business owners are trying to reduce their outgoings by reducing their current loans, while others are looking for cash injections for expansion. In both cases, cash flow is a major concern, and many businesses are considering bridging Loans to overcome their cash flow issues.
It seems that p2p lending platforms and bridging lenders are bringing an economic storm by introducing new products in the finance industry that have low-interest rates and high loan-to-value. They are attracting more customers by providing loans that meet their requirements and helping them in completing property purchases quickly. Bridging financing is a beneficial tool for purchasing property at auction. The economic situation and trends in the property market change rapidly, so you must research before taking out any type of loan.