High value property is a highly competitive sector of the UK real estate market, and requires specialist bridging lenders to provide bespoke financial solutions
Throughout the UK there are many investors who make a living purchasing and trading in high value property, and these professionals rely on high quality bridging finance in order to enable flexibility and stability within their sphere of operations. Without the backing of highly experienced financiers it’s impossible for these developers and investors to conduct business in an efficient and timely manner, and bridging finance is vital to the continuing prosperity of the high value property market.
While there are many bridging lenders throughout the UK, only a small proportion of these will be able to provide the dedication and expertise that high value property bridging requires. While many bridging lenders throughout the sector offer loans from £10,000 upwards, the bridging providers who cater to these top end property investors typically don’t deal in loans under a million pounds. When funds of this size are changing hands it’s vital to have access to the experienced, trustworthy advice of a high value bridging expert, and the UK’s bridging finance sector is able to provide several such lenders.
The world of property finance is highly competitive, with businesses leveraging their assets as much as possible in order to acquire new investment opportunities. This can leave developers exposed to financial difficulties if inappropriate loans are taken out, which means that before proceeding with a bridging loan of any type, investors should be sure to consult an experienced financial advisor.
Bridging loans are widely used throughout the property development sector: they enable developers to quickly seize opportunities and kick-start projects without the need to obtain long-term financial backing, which helps keep the real estate market buoyant. However, the needs of high-value property investment are substantially different to many of the other areas in which bridging lenders operate, and require a highly experienced touch to handle properly.
When budgets are large and the margin for error is very low, it’s vital for borrowers to know that their lender can provide a highly dedicated team with a great deal of experience in their sector. The needs of high value bridging finance require a team of expert lenders that can exceed their borrower’s expectations at every turn, which is why high value bridging lenders pride themselves on providing exceptional service throughout the lending process. Bridging lenders in the high value property lending sector have several key advantages over their competitors, and must maintain a market-leading service in order to remain at the top of the game. Some of the key aspects that high-value lender requires are outlined below, along with the ways in which these benefit their clients.
Lenders who deal with loans in the tens of millions must have links to the right sort of financiers, or they will struggle to secure competitive rates for their clients. Lenders must know which loans are suitable for which investors, because this allows them to quickly and easily match borrowers to finance providers. Knowing who’s looking to lend and what their appetite is is vital for any high value property bridging lender, and securing competitive rates for their client relies on maintaining close ties with many hedge fund managers, peer-to-peer lenders and private individuals.
Many high-value bridging lenders are based around a small core of experts who are highly experienced in the field. This allows customers to speak directly to a decision-maker and outline their proposal, rather than having to submit to various questionnaires and checks. This ensures a tailored approach to lending that reflects high-value bridging’s need for an individual, personal lending solution.
Bridging lenders pride themselves on their ability to meet a short deadline, but arranging a fast loan to temporarily cover the cost of buying a bungalow is very different to financing the purchase of a large Kent estate. Working quickly to a timescale becomes harder and harder the more money’s involved, and high value property lenders have a streamlined, dedicated team in place that can work to their client’s timescales in any situation.
Speed is a form of security in itself, because a lender that can move quickly alleviates the pressures of completing a deal in a short timespan. Because specialist high-value lenders can put a loan package together at short notice thanks to their intimate links with the lending community, they can provide their customers with the security of having a stable source of finance in place.
There are many ways in which high value lenders can tailor their loans to meet each customer’s individual needs. While the demands of high value lending are similar across the board, each and every client will have a different set of requirements that lenders must meet. Being able to meet these requirements is what makes a top-notch high-value property lender, and there are several key areas in which flexibility is vital. For instance, providing adequate security for the loan is of paramount importance; while mainstream lenders might not approve a loan for a client who appears to be over-extended, high value bridging lenders can see past this blinkered “check-list” approach. By offering a combination of first and second charge securitisation, bridging lenders enable borrowers to take out loans for 100% of the costs and fees of their new purchase, while still benefitting from a market-leading rate.
In addition to this, borrowers also stand to benefit from bridging lender’s ability to “roll-up” the cost of the loan until it’s repaid. This allows borrowers to defer the entire cost of a loan (along with its interest) until they’ve sold their existing property, or have obtained a mortgage for their new one. By limiting the impact of the loan on their client’s day to day expenses, they enable borrowers to leverage their assets more flexibly for fast, secure expansion.
Bridging loans are the lifeblood of the property investment market, and are a crucial tool for the security and buoyancy of the UK real estate sector. By enabling investors and private individuals alike to benefit from the flexibility and expertise of experienced bridging lenders, high-value properties can be bought and sold quickly and smoothly.
A bridging loan is a short-term loan secured against property. It allows you or your business to “bridge a gap” until either longer-term finance can be arranged, or the underlying security or other assets can be sold.
Bridging loans can be used for a wide variety of purposes. Perhaps the most common purpose is to allow you to buy a new home or business premises before you have sold your existing property. They can also be used by investors to buy property at auction, landlords to acquire buy-to-lets, developers to acquire and renovate properties and businesses to raise working capital. There are a myriad of different uses and Bridging.com can help to find the best loan for you.
Loans generally range from £10,000 to £50M with smaller or larger amounts provided on an exceptional basis. The value and equity within the property or properties you are securing against will determine how much you can borrow. The maximum loan to value (LTV) currently offered by most lenders ranges between 65-80%
Generally loans range from 1-24 months in duration although they can, in exceptional cases be both shorter and longer. It is wise to go for a period slightly longer than you think you need to redeem the loan given that reputable lenders will refund any unused interest if you settle them early. Bridging.com can help you to find these lenders.