Bridging finance demand has grown in the last few years, and has not slowed down due to the EU referendum result.
According to a November 2016 PropertyWeek.com article, the Bridging Index report estimates that gross annual bridging lending has risen from £1.6bn to £4.4bn in the last four years.
Bridging finance expert Stephen Wasserman, writing for PropertyWeek.com, says that many of the large main lenders are slow to approve loans and mortgages. In order for purchasers to complete property sales, bridging loans are being used until more long-term finance is available.
Wasserman states that bridging loan lenders are professional and, with tighter regulations, borrowers have confidence in the bridging sector, Competition amongst lenders is fierce and this has resulted in lower rates for borrowers. There are bridging loans available for as little as 0.75% interest a month, with no penalty charges for early repayment.
Another advantage of bridging loans that Wasserman cites is that they can be arranged in principle in 24 hours, and the money can be available in 48 hours.
Since the Brexit vote, the auction property market has remained busy. Most property auctioneers require a 10% deposit to secure a winning bid. Bridging loans are regularly used to raise the finance for these deposits.
Another growth area is for the funding of property conversions, particularly changing office buildings to residential accommodation.
Bridging loans are ideal for entrepreneurs who want to quickly finance business opportunities. Despite the economic uncertainty following Brexit, Wasserman believes that bridging lenders will continue to be busy.