Why is Bridging Finance More Popular?

Why is Bridging Finance More Popular?

Since the start of 2018 we have seen the costs of bridging loans reduce even further as the competition in the sector increases.

Traditionally bridging loans have been perceived as the lending of last resort and offered by rip off banks who know the clients are desperate and take advantage. However, with prices now starting from 4.8% per annum, more and more people should be considering bridging finance as an option and it is best used in the following circumstances –

Auction purchases and the need to complete quickly. This can also be a requirement if you are buying a new build property or entering a chain of property sales late in the day. Typically bridging loans take less time to organise and the banks lenders and surveyors are experienced in the need for speed and can make your deadlines achievable.

Repairing a broken chain. There’s nothing worse than having your heart set on a property for your buyer to pull out at the last minute. Effecting a bridging loan will enable you to complete on your purchase whilst waiting for your current property sale to complete.

Extending the lease on your current property. Many High Street lenders will not lend against the hope value of an extended lease, but bridging companies will. You simply need to use the bridging loan to buy your lease extension and then remortgage the property (using its higher value with a longer lease) to repay the loan out of the newly acquired equity.

Buying an unmortgageable property. We’ve all seen the programmes on TV that show speculators buying tired, run down or even derelict properties and developing them in to a lettable or saleable condition. Bridging lenders do not need a property to be habitable to lend you money against it, it merely needs to have a value. You can use the bridging loan to buy the property and use your savings to develop it in to a habitable condition and then simply sell it for a profit or remortgage it as a buy to let and repay the loan.

Our main reason for using bridging loans is downsizing. Many of our clients have accumulated equity in property over the years and want to move to their next (smaller/cheaper) dream home when the family have flown the nest. The thought of entering in to a drawn-out chain and missing an opportunity if the ducks weren’t all in a row is too much of a gamble and seems a lot of hassle. The bridging loan will enable you to buy the next property, move in and then sell your current place at your leisure and the price you require.

If you are contemplating the above, please get in touch with one of our bridging loan specialists to see how we can help.

Connect with us

Connect with us on social media to keep up with the latest news and special updates


Contact Us

5 Badminton Court,

Station Road

                Yate, Bristol

                BS37 5HZ

Find us on Google

Chartwell Funding Limited is authorised and regulated by the Financial Conduct Authority and is entered on the FCA register (www.fca.org.uk/register) under reference number 458223. Registered office 5 Badminton Court, Station Road, Yate, Bristol, BS37 5HZ. Registered in England number 05875291.