Bridging Finance Loans Increase £1.79 Billion (GBP) In 2013
New data from Positive Bridging Finance shows that buy-to-let property investors are turning to bridging finance in order to facilitate property purchases and rental property refurbishment and gross lending to August this year reached £1.79 Billion (GBP).
The research discovered a 25% increase in bridging loans taken out during 2013 and on average, a typical bridging loan used by property investors is around £220,000 (GBP), up 5% year on year with an average term of six months.The findings also indicate that buy-to-let property investors are using bridging finance products to acquire additional properties for rental portfolios, with
- 36% used bridging finance to purchase terraces and town houses
- 29% used bridging finance to purchase flats and apartments
- 9% used bridging finance to purchase semi-detached properties
- 5% used bridging finance to purchase detached properties
Bridging finance worth £364 Million (GBP) was loaned during July and August 2013. More buy-to-let property investors are beginning to understand the benefits of using bridging loans to acquire and refurbish properties for rental or resale purposes.
The availability of buy-to-let mortgages has begun to improve, although there remains a huge shortfall on the number of available products that portfolio landlords and property investors can use. Bridging finance provides fast, short term loans that are ideal for turning around properties quickly.
Residential property prices may be increasing across the country, but many UK based buy-to-let property investors are still searching the market for below market value properties which can provide greater yields from rental income.
Portfolio landlords are using bridging loans to finance the redevelopment of dilapidated properties which they may normally be unable to secure mortgage finance on through traditional means and bridging finance allows them to acquire the property, do the required works and then eventually mortgage when the property is ready.
The demand for bridging finance loans has been huge this year, and this trend could continue throughout 2014.
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