Bridging: More deals, better rates
Previously regarded as somewhat of the dark art of the property world, bridging has undergone a real transformation in recent years and is now a very useful tool for the savvy property player.
Just as little as two years ago, bridging rates were averaging between 1 and 2 per cent. However a combination of better understanding, a higher media profile and increased competition current rates have dropped to a stable 0.65-0.75 per cent.
As a result bridging finance is becoming increasingly popular with property developers and investors who are able to secure a cash injection almost instantly – some transactions have been finalised within days – rather than relying on the high street lenders with a slower turnaround time. They are then able to arrange a more traditional way to finance the property.
Lynne McCaffrey, Head of Property, comments:
“Taking out a bridging loan is getting easier all round; from better rates to increased availability and thanks to our joint representation the legal bit is cheaper and easier too.
“But however easy it becomes and however popular it gets, borrowers must not forget bridging finance is a short term loan and that they need a realistic exit strategy to minimise the financial implications.”
Content correct at time of publication