Is the housing market improving?

There are without doubt more mortgage products available in the residential housing market today. This may have contributed to the small increase in house prices over the last 3 months as reported by the Halifax & Nationwide.

As bridging lenders products tend to follow the mortgage market any changes from their perspective can be a forward indicator. We note the following news from the bridging loan market:-

1. A recent broker survey noted an upward trend for bridging loans.
2. One of our funders has expressed an interest in financing small, niche property development projects.
3. Another lender has recently raised £75m of capital for new lending.
4. Finally, one lender has reported a 100% increase in actual lending over recent months.

There is obviously a long way to go before the inevitable recovery, but maybe we have reached a turning point.

Bridging loans and buy to let investments

A news report today says that experienced buy to let investors are using bridging loans to take advantage of "distressed residential & commercial propery sales". Demand for bridging finance has increased by over 200% over the last 9 months, apparently. We think this probably means enquiries rather than completions based on the low loan to values on offer by the larger bridging lenders. However we are positive that the main thrust of the article with regard to experienced landlords is without doubt true.

As commercial loan specialists we can help with all short term bridging requirements and arrange the exit too! Visit our web site for more information and don't forget to check out our latest buy-to-let mortgage deals while you are there.

Can a Bridging Loan Really Complete in Less than 24 Hours?

Most bridging lenders emphasise their speed of service when advertising short term loans. Providing funds within 24-48 hours from application to completion shows the flexibility of non-status bridging loan products and the providers. Can a property deal really be financed in such a short time-scale? Well, the answer is yes, but I wouldn't bank on it!

To achieve such a fast loan completion much of the background work needs to be already available, such as a property valuation that is acceptable to the potential bridging lender with most of the necessary legal work ready and waiting at your solicitors, i.e. search, title deeds etc. Representatives of both the lender and borrowers need to be in a position to move quickly. Even when everything is available things can still go wrong, for example, an unexpected question arises from the documentation provided.

Our simple recommendation is not to get into the position of needing a bridging loan in such a short timescale, even where a more relaxed 5-10 day timeframe is available, the unexpected can cause delays. Where a customer needs to raise cash and a high speed bridging finance solution is the correct loan option then the borrower should minimise the risk of delay by keeping in control of what is in their own domain i.e. own solicitors and providing all requested information at the start of the process as delay here can extend time to completion resulting in a missed deadline.

If you need finance quickly then a good bridging loan broker should be able to help reduce the potential for delays.

Bridging Loans - Not quite as good as they were?

Bridging Loans being heavily marketed

I have been receiving an awful lot emails from new web sites and lenders pushing the virtues of short term bridging loans. They are all putting out the same message, telling me how good they are and encouraging people like IFA's to introduce new business to them.

As an established commercial finance broker we are well aware of the value bridging finance can offer to potential users and of course the dis-advantages of short term finance. When it's right for our customers then a commercial bridge will be offered as the best option.

So why might Bridging Finance not quite be as they were?

Well along side all this marketing more than one Bridging Lender has quietly reduced the Loan To Values they now offer. Indeed one that was ahead of the pack has dropped right back into the middle, perhaps even lower end when the prices rises for lower geared loans are taken into account.

So the credit crisis slowly rolls quietly out into the market place, but there is a glimmer of hope, that is if confidence in property is the key to salvation. I've just read that property prices in central London have grown by 7% over the last quarter, so perhaps things are not as bad as they seem!