Ownership of a listed building in the UK comes with a long list of pros and cons.

On the plus side, you may find yourself in possession of a completely unique property with the potential to generate huge capital gains over the course of time. Not to mention, it is an inspiring place to call home for yourself and your family.

In terms of disadvantages, the upkeep of a listed building can be much more of a challenge than that of a conventional home. There may also be strict limitations placed on modifications that can be made to the property (inside and out), ruling a great many potential renovations and improvements out of the equation.

Then comes the small matter of funding the purchase of a listed building, which is not quite as easy as simply shopping for a conventional mortgage.

There are three types of listed properties in England and Wales, which in all instances call for an entirely different type of mortgage:

• Grade 1: Buildings of outstanding or national architectural or historic interest
• Grade 2: Particularly significant buildings of more than local interest
• Grade 2: Buildings of special historic or architectural interest

The overwhelming majority of listed buildings (around 92%) fall within the Grade 2 category. This means the lowest level of protection and preservation, but at the same time, it can still result in major restrictions on what can actually be done with the property you buy.

For example, you may need to obtain formal planning permission simply to upgrade the windows or doors or to install exterior decking.

But many would argue that what you get in return more than justifies the downsides. Living in a listed property can be a genuine joy, but how do you fund the purchase of a listed building in the first place?

The Grade 2 listed property mortgage market

Qualifying for (or even tracking down) a mortgage for a Grade 2 listed property on the High Street can be difficult. Many lenders do not offer such products at all, and those that do have a tendency to restrict them to borrowers who fulfil fairly extensive eligibility requirements.

For example, interest rates on a mortgage for a listed property will usually be similar to those of a conventional mortgage. But while a standard mortgage may call for a minimum deposit of just 10%, it is often necessary to provide a deposit of 25% to 30% for a specialist mortgage for a listed building. In addition, it is not always possible to take out a mortgage on a listed building over a term of more than 20 years.

Mortgage availability and qualification criteria differ significantly from one type of listed building to the next. In the case of a listed property that features outbuildings, comes with a significant amount of land attached, or is used for any type of commercial or semicommercial purposes, finding an accessible and affordable mortgage can be more difficult.

Purchasing listed properties with specialist loans

Enlisting the support of an experienced broker can simplify the process of tracking down an affordable mortgage for a listed property. There are countless options available on the secured lending market, including short-term bridging loans.

Unlike a traditional mortgage, a bridging loan can be arranged within a few working days, and the funds can be used to purchase any type of property in any state of repair. They can also be taken out by individuals with poor credit, no formal proof of income, or even a history of bankruptcy. Whether you are planning to live in the property yourself, retain ownership for BTL purposes, or sell it on for capital gains upon completing any necessary refurbishments, a bridging loan can be a uniquely flexible and cost-effective solution.

As typical bank loans become more difficult to assess, bridging loans are increasingly becoming the go-to option for not just people but also businesses that are in quick need of cash.

Initially, a bridging loan was simply a temporary or short-term loan used by homeowners to get quick cash to facilitate the purchase of a new home. The loan operated by “bridging the gap” between a homebuyer’s new mortgage and the sale price of a new home in the event the homebuyer hasn’t yet raised funds by selling his or her current home. Such a bridging loan would be secured on the buyer’s current and yet unsold home, while the loaned sum is used as a down payment on the new home. But over the years and due to its increasing popularity, bridging loans have evolved into a more versatile financing option.

As of 2018, individuals and businesses alike have found other ways to make the most of bridging loans. Below, we’ll be looking at the top five ways individuals and companies will use bridging loans in 2018.

How individuals are using bridging loans in 2018:

1. To avoid repossession: For homeowners who lack the financial capability to stave off a repossession, bridging loans have become a saving grace that can be accessed quickly and used to settle debts. If debts are piling up and there is no immediate cash source available, a bridging loan can be used to quickly settle a portion of the debt for the short term and thus delay a repossession.
2. To buy a property at auction: If a wonderful property at a great price is suddenly made available at an auction, instead of letting the opportunity pass by, a bridging loan can be used to finance the purchase of the auctioned property. It can also be used to snatch a repossession and grab a bargain.
3. Property development purchases: If you need to renovate or upgrade your property and you require quick cash, a typical bank loan might take a long time to get approved or might not even be approved at all. A bridging loan, on the other hand, can be applied for quickly and received within a few days. The loaned sum can then be used to convert your home, refurbish it, or even extend it.
4. To buy time to seek a longer-term loan provider: If you need money fast for a pressing matter, you can use a bridging loan to finance yourself for the time being until you are able to get a longer-term loan provider. This move can be an expensive one, especially in light of the cost of bridging loans, but it can also be a fast and effective solution to a pressing financial need.
5. For capturing an investment opportunity: Opportunities are unpredictable and can pop up at any moment, including moments when you lack the financial capability to grab the opportunity and make the best of it. But instead of letting the opportunity pass you by due to a lack of funds, you can grab a bridging loan and use it to seize the investment opportunity. This tactic can be used to change the financial fortune of anyone who is presented with an especially favourable investment opportunity.

These are just some of the ways people are currently making the best of bridging loans.

How businesses are using bridging loans in 2018

It’s not just individuals that are making the best of bridging loans, as businesses have also found ways to use the fast and easy option to their benefit.

Some of the ways companies are presently utilising bridging loans include:

1. For grabbing business opportunities: In the world of business, time is of the essence, and the ability to make split-second financial decisions can make the difference between a huge profit and a great opportunity lost. Rather than being restricted in investment opportunities due to a shortage of funds, bridging loans provide an avenue for businesses to get loans fast and make financial commitments to sudden and exciting new opportunities. A bridging loan can be used to finance the buying or starting of a new venture or to acquire another business in a strategic corporate move. This is possible thanks to the fact that a bridging loan can be accessed within a few days instead of the lengthy time periods required for approval of traditional loans.
2. For enlarging commercial operations: A business that’s looking to expand its operations into new locations or diversify its business can use the finances from a bridging loan to accomplish this quickly. Such a loan can also be used to purchase new equipment and serve as regular funding to accomplish new business objectives.
3. For refurbishments: An office refurbishment might be long overdue, but a company is unable to carry it out due to financial constraints. A bridging loan can take away such constraints by offering some quick financing to fix up either the office area or give the retail space a facelift. A benefit of this is that the loan can be repaid when the business premises are remortgaged after the refurbishment has boosted the value of the premises.
4. Refinancing owed debt: In the event there is a short-term cash flow crisis that leads to debt, a bridging loan can help pay it off or buy more time until the business can get its affairs in order. Also, refinancing can aid in consolidating existing debts into a single entity, which is much easier to manage. The loaned sum can be used to pay off lenders or settle outstanding payments to key providers and suppliers.
5. For relocation: If your business is looking to move to a better location in 2018 that will expose it to greater opportunities, bridging finance can help facilitate the relocation by providing the cash you need to purchase a new business space. It’ll also make available cash for expenses such as purchasing new furniture, setting up a new IT infrastructure, removals, and much more.

So rather than restrict yourself to the arduous process of applying for a traditional loan, try out a bridging loan for faster access to needed funds as well as a less strenuous loan application process.

It’s becoming clear that the rise in bridging loan activity isn’t about to go into reverse anytime soon. 2016 brought about record growth for the industry, and this year is already off to a flying start. But what’s particularly interesting is the way in which key players are reporting not only a dramatic spike in overall interest in this kind of financing but also a dramatic change in the lenders and intended purposes of the loans being investigated and applied for.

So along with the usual commercial property development financing requirements, exactly which other areas are driving this enormous increase in overall bridging loan activity?

Domestic relocation

Well, firstly, there’s been a significant increase in the number of lenders opting for bridging loans as part of the everyday domestic relocation process. In so many instances, the delays involved while closing the sale of a currently owned property can make it difficult, or perhaps even impossible, to take advantage of outstanding purchase prospects, which may present themselves for a limited time only. In order to avoid missing out on such opportunities, many homebuyers are turning to affordable, short-term bridging loans as a means by which to purchase their dream properties while waiting for their own home’s sale to close.

Auction property sales

Likewise, outstanding opportunities often present themselves at property auctions, though meeting the payment requirements set out by those selling the properties can be difficult. Along with immediate deposits payable on the day, it is usually necessary to pay the entire balance within a matter of days, certainly no more than a couple of weeks. While conventional mortgage products are entirely unsuitable for such purposes, bridging loans are proving to be uniquely accessible and affordable for auction property purchases.

Renovation and extension

Across both domestic and commercial sectors alike, bridging loans can be uniquely convenient and beneficial when it comes to carrying out urgent building renovations, extensions, and other maintenance work. It could be that, for any number of reasons, such work is essential in order to close a sale or perhaps begin letting out the property to tenants. Where time is a factor and it is preferable to pay back the loan in a comparatively short period of time, bridging loans are proving to be incredibly versatile for urgent property work of all kinds.

Business shortfalls

Last but not least, it’s often the urgency with which the money is needed that makes bridging loans ideally suited to the needs of smaller to medium-sized businesses. From unexpected expenses to tax payments to temporary revenue shortfalls and so on, there are endless reasons why any business may need a quick yet relatively sizeable cash injection in order to prevent a potential disaster. When this occurs, working with a leading broker specialising in alternative financial products can help open the door to a variety of intelligent products and services. Gaining access to affordable and quickly available financing can often be a matter of life or death in the small business world, which is precisely why bridging loans are becoming assets of such extreme importance.

Do you need a competitive, non-status bridging loan?

If you are looking for flexible, low-cost finance secured against your assets that won’t be affected by your credit rating or borrowing history, then a non-status bridging loan is the perfect solution. When a property owner applies for non-status bridging finance, the lender is less concerned about your financial past and more interested in the real estate that you are providing as security.

The vast majority of secured loan products are quite complicated to arrange and can take weeks to process, assuming your application is successful in the first place. Of course, many loan specialists are offering bad credit products, although the cost of borrowing is usually excessive, to say the least. With a non-status bridge loan, you can get a decision in less than 24 hours, and the funds are typically made available within 5 to 7 days.

How much can I borrow?

In most cases, non-status bridging finance is available with a loan value of up to 70% or more. However, if a borrower can provide additional security by offering a second or third property as collateral, an LTV rate of up to 100% is possible. Of course, this will entirely depend on the lender you choose to work with. By using the services of a specialist broker such as UK Property Finance, sourcing a cost-effective product that is tailored to fit your individual borrowing circumstances is effortless and stress-free.

Non-status bridge finance for any purpose

With a non-status bridge loan, you can release the equity in a property, or multiple properties, that you own and use the funds for any reason you see fit.

Common uses of this type of finance include:

• Financing property refurbishment and development
• Funding a property purchase while waiting for a different property to sell
• Buying property at auction
• Paying an urgent HMRC tax bill
• Eliminating short-term cash flow problems in business

Bridging loans are short-term products that can be used for all manner of reasons. With low-interest rates, flexible borrowing criteria, and the option of rolling up the interest until the end of the loan term, non-status bridging loans are an incredibly attractive option that can be arranged swiftly and effortlessly, regardless of your personal borrowing requirements.

The Association of Short-Term Lenders has just released a report that shows a sustained upward trend in the number of bridging loans issued in the last quarter.

In the period leading up to March 31, 2016, ASTL members provided their clients with over £2.7 billion in bridging finance products, and this amount is expected to increase again in the coming months. In terms of percentages, this represents a 16% rise in the amount borrowed compared to the period ending March 31, 2015.

According to Benson Hersch, ASTL chief executive, bridging finance is now a highly established niche product that is going from strength to strength, even though the economy itself is still a cause for concern for many business owners. The main reason for this is the high level of uncertainty following the results of the referendum in June, the effects of which have yet to be seen in the marketplace.

To quote Mr Hersch, “As applications begin to pick up over the next quarter, despite some negative factors, the need for bridging finance is likely to continue to grow, and our members are well-placed to take advantage of opportunities.”

As an added boost to the bridging loan industry, the actual value of bridging loan applications has also increased from the previous year by just over a fifth. However, the overall value of the loan book has experienced a small dip of around 4% when looking at annual trends. This provides a good indication that the loans themselves are being paid off at a higher rate.

With more and more banks and other high-street lenders tightening up their borrowing requirements, it seems that bridging loans are gaining serious ground as a genuine way forward for those in search of short-term finance as a means of providing growth.

Unlike traditional mortgage products and most other loan types, bridging finance is much more flexible and widely available. Bridging loans can even be sourced for clients who have experienced bad credit problems and for those who are unable to provide proof of income.