The bridging loan market in the UK is steadily growing. More and more people are considering this form of financing in order to secure an excellent deal for purchasing property in the UK. The reason why there is a growing market for bridging loans is that there is a significant demand for finance in the domain of property investment. Although some borrowers still opt for mortgages, bridging loans are different in the sense that they are more flexible.
A Competitive and Flexible Form of Financing
Usually, as the target audience for a specific product or service increases, so does the variety of products or services. The same goes for bridging finance. In other words, as this form of financing grows in popularity, lenders are more flexible in the loan terms they provide – in this way, they make the market competitive.
Professional property investors have been using bridging loans for years in order to turn around properties and act fast. Meanwhile, when applying for a mortgage, the time required to get approval is much more significant, not to mention that the criteria are more stringent.
That is not all, though; the cost of a mortgage is significantly higher, which could minimise the financial return of the investor. Meanwhile, a bridging loan enables an investor to act and move fast, to embrace a deal whenever it emerges and to make the most out of it. This is primarily why the average size of a bridging loan has also grown over the last couple of years.
A Developing Market Segment
Furthermore, there are more people now that resort to bridging loans to cover the costs of large, complex projects. This could also mean that more and more people think of this option as a good, reliable alternative. In addition to that, as figures indicate, the average monthly interest rate for this type of financing has decreased. This, of course, has to do with the size of the average loan increasing. Hence, as grim as the economic condition in the UK might appear at the time being, things seem to be looking up – at least in the bridging loan sector.
Investors who are considering this type of financing for their upcoming project should definitely use a bridging loan calculator. This is a handy tool. It gives a fair idea of the loan you might get, the additional costs associated with the loan, and other important information. In this way, one can make a sensible decision prior to applying for a loan. Due to the shortage of residential property in the UK, it makes sense that investors want to seize each opportunity and take advantage of it. And a bridging loan allows one to do so.
The Bottom Line
On that account, we are looking forward to observing the way in which the bridging loan sector is due to develop further in the years that follow. Most likely, it will keep growing as it has been in the last couple of years, providing numerous opportunities to enthusiast investors.
If you would like to know more about bridging loans please contact property finance partners – bridging loans & development finance. on 020 3393 9277 alternatively, use the form below to apply.