The high value bridging finance market is best described as fragmented, specialised and one which can be complex. The specialist nature of this market means that very rarely will you come across a one size fits all solution. Bespoke high value bridging loans are commonplace, offering the chance to bridge a gap in finance when acquiring property, undertaking a refurbishment or starting a new development.
The bridging finance market is very saturated and accessible in the £500-£750k range. This is many lenders sweet spot and is where competition is at its most intense. Borrowing over £1 million is an important transition, many more specialist lenders and private banks enter this space, so the range of options increases to the borrower. We would also expect to see a greater level of security available. Of course, the higher the bridging loan the more acute the importance of pricing becomes. We however define high value bridging finance as mortgages more than £3 million. Here the market is at its most discrete, the security is valuable, price sensitivity is at its highest and the transactions are as a result more complex.
There is no single way to answer this. Every case is individually negotiated on its circumstances and the price is matched to the risk. We work with the widest panel of lenders, from global private banks to specialty funds. This access, coupled with our vast experience in this area ensures that we will find the best solution. Of course – price is not always the defining factor – speed, privacy, flexibility and confidence all are often just as important.
This depends on the circumstances, ability of the team involved and the borrowers prove expectations. We can have bridging loans agreed in a matter of hours. We can have valuations and legal teams instructed on the same day. We manage the whole process as closely as possible to control all outcomes. Often, faster completions come at a higher price to less urgent application but this again depends on the circumstances. We will get everything completed as fast as we possibly can. Our record is 3 days start to finish.
Bridging loans secured against the property you do or have lived in are regulated. Bridging loans against commercial property, property development sites buy to lets are not regulated, vut there may be reasons they are. This area is complex and in many circumstances can be subject to interpretation. We are an FCA regulated mortgage brokerage so can offer clear guidance in this area.
Bridging finance is traditionally a short-term financial solution which allows the release of long-term value from an asset. This may be something as basic as covering a funding requirement between the sale and purchase of a home when timings overlap. It can also prove to be a useful short-term substitute for investment cash flow as an investor awaits funds from an asset sale.
One of the more common uses for bridging finance is to fund refurbishment/redevelopment of a property. This short-term funding will enable the refurbishment/redevelopment to be completed with an end valuation uplift far outweighing the cost of the bridging finance, including interest. The asset is then refinanced on its uplifted refurbished/redeveloped value, often on a significantly reduced rate of interest. Depending upon the type of investment and eventual uplift, the investor may even be able to bank a short term profit as a consequence of the refinancing.
As we touched on above, the high value bridging finance market is fairly fragmented and specialised. Thankfully, during our years of dealing in this market we have built up extremely useful contacts and access to funding which is not always in the public domain. While many will be aware of high profile bridging lenders, there are also discrete private banks which specialise in such transactions. We are also able to call upon hedge funds, private individuals and peer-to-peer lenders to create a degree of competition amongst possible financiers.
The legal process surrounding high value bridging loans can often be extremely complex, sometimes interacting with many other financial instruments. It is vital that legal agreements are watertight, legally binding and explain in detail the terms of the transaction. Those who have come across bridging finance legal agreements will be aware that valuations, exit routes and security, form the basis of such deals.
Bridging finance is a short-term solution which if managed correctly can help to release long-term value. The greater the level of security an investor can give the more preferential the terms and the more competitive the rate of interest. We can advise you on the type of assets which attract bridging finance companies, obtain realistic valuations and plan for achievable exit routes.
We have access to an array of competitive bridging finance operations, legal advice to ensure everything is water tight and can assist with putting together an eventual exit route. Indicative pricing is readily available to those considering going down the bridging finance route together with advice on backup insurance applications. Having put together deals involving parties in different countries, an array of different assets and multi-million-pound funding, we have the experience, the know-how and the skills to put together a bespoke bridging finance proposal for you. Give us a call today to discuss your requirements in more detail and put together a no obligation proposal.
The market is very difficulty to define. Many of the large bridging lenders publish their figures and there are several industry indexes which give an idea. However the vast majority of bridging loans are private, individually negotiated and do not come from the obvious places. As a result we do not think there will ever be an answer to this question.
The UK bridging finance market is highly evolved and speciality. There are hundreds of lenders and a real sense of competition. International markets are less evolved but there are options available.
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