Posted July 2, 2020

MMA finds growing demand for bridging finance


This year has not been quite what anyone was anticipating – the coronavirus pandemic has swept communities, cities and countries across the world and has created an array of uncertainty. It has become, for many businesses, a time of survival.

However, as lockdown continues to ease, businesses and industries are beginning to pick back up again. As estate agents have recently been allowed to open, property investors are seeing this as a great time to be getting back into the industry.

The Mortgage Market Alliance has found that with the purchase market developing over the coming months, demand for bridging finance is strong and will continue to grow.

This boost in the property market has meant that there has already been a vast increase in availability of commercial mortgage products, especially in those specifically aimed at landlords. This includes products with five-year fixed rates with only two years of early redemption penalties as well as access to fixed terms at a margin of c.2.5%.

How is bridging finance different?

Bridging finance works differently to that of a commercial mortgage, as it is a short-term and unique finance facility that can be used for a variety of different reasons, rather than a long-term agreement for commercial purposes. They have become more prevalent in recent times with the bridging loan market growing from £1 billion to over £8 billion in a decade.

The loan will be secured against the borrower’s asset and typically this will be property. They are used by property investors, landlords and developers who want to secure a property while waiting for an existing one to sell. In addition to this, there is also a regulated bridge that is used by homeowners who wish to purchase a property before their existing one sells or have had a chain break.

The application is swift and as such, you can usually receive capital in your account within weeks, and sometimes even days. This is great for those looking to attend an auction and in need of finance quickly.

Now that the property market is open with estate agents, valuers and builders’ merchants being allowed to work, auction houses will also get busier. This allows the property market to start regenerating, creating great opportunities for borrowers.

If you would like to find out more information about bridging loans, read our guide to bridging finance or find out more about the advantages of bridging finance.

Your specialist bridging finance broker

As one of the UK’s leading bridging finance specialists, we are recognised for our ability to structure even the most complex of cases. We are able to offer a range of bridging products to enable landlords and property professionals to continue to grow their portfolios and take on new projects.

A combination of experience, knowledge and service, provides us with the right skills to supply out clients with the expert advice needed. Call one of our dedicated advisers on 0121 309 0444 to find out more.