With the current unpredictable climate, bridging finance has been increasingly beneficial for developers and property buyers. Last year, we saw the bridging market have its highs and lows, but what will 2022 bring?
Bridging finance performance in the summer
During the summer of 2021 there was a surge in bridging loans as people rushed to complete property purchases before the end of the stamp duty holiday. After the end of the holiday, the bridging market had a dip due to the continuous increase in residential property prices.
However, due to the effect of the pandemic on many businesses, our team received a higher number of bridging loan requests from developers looking to purchase sites such as office blocks to convert them into residential sites.
Post-pandemic challenges
After the pandemic restrictions were lifted, the bridging market faced a few new changes:
- The digital revolution – the pandemic accelerated digital transformation. New developments in technology helped the bridging finance sector, from biometrics to assist with the underwriting processes to diligence process management. The Bridging Market Study released by EY back in April 2021 revealed that technology is a key challenge for 48% of its respondents within the market.
- Service synergy – complexities in the sector raised the need for synergistic services, with providers needing to deliver a more end-to-end solution.
- Legal services – Slower legal processes, particularly due to remote working, affected the industry. This highlighted the importance of selecting the right broker to guide property investors in the right direction and advise on which provider would be best.
What type of projects did we see?
Last year we helped several of our clients source bridging loans for various property types from apartment development projects to a client purchasing their dream home in Southampton.
As the New Year has just begun, have you started thinking about any potential development projects? According to Property Reporter, house prices dipped by 0.7% last month, which could mean that this decline in house prices might continue over this year.
If house prices continue to decrease over the next few months, it might be a good time to consider beginning a development project.
Our Head of Bridging & Development, James Danks, predicts that,
“Access to funding and appetite will stay strong throughout this year. Unfortunately, with the ongoing uncertainty of COVID still around, there may be more opportunities arising for clients looking at commercial premises with potential to obtain planning or convert to residential under PD rights.”
How Finance 4 Business can help
If you’re an investor or developer seeking a bridging finance or development finance loan to purchase land or property, we can help you!
Our team of experienced bridging finance specialists can offer expert advice on the options available to you, with an in-depth understanding of the property market and a strong relationship with commercial lenders.
Contact a member of our team by calling 0121 309 0444 or email enquiries@finance-4-business.co.uk.