Olivia Latham

Olivia Latham

Olivia Latham creates articles and press releases for property finance, auction finance, repossession, secured loans and all other finance available at UK Property Finance.

UK Property Finance Launches Free Online Bridging Loan Calculator

With an ever-increasing number of commercial developers, buy-to-let landlords, and other UK property investors turning to bridge loan providers for fast and flexible financing options, one of the country’s most reputable brokers has recently introduced a new online tool that is designed to give a clear picture of the overall value and affordability of any given borrowing product. With the new bridging loan calculator on the Bridgingloans.co.uk website, potential borrowers are able to see in an instant just how much a secured short-term loan will cost, including the amount of interest they can expect to pay and any additional fees.

Initially devised as a short-term finance product that serves as a necessary and convenient bridge between two property transactions that may otherwise prove impossible to fund, bridging loans are completely unrivalled in terms of the speed at which they can be arranged, repayment flexibility, and the low cost of borrowing they provide. With the new bridge loan calculator provided at Bridgingloans.co.uk, working out the precise cost of taking out such a loan has never been easier, and the tool can be used without any obligation to apply.

Quick and intelligent finance

“Over the last couple of years, the team at bridgingloans.co.uk has come to realise that the vast majority of first-time bridge finance borrowers want nothing more than to check the figures in order to see just how viable this type of short-term loan product can be. Although bridging loans are a less common type of finance in comparison with residential or commercial remortgaging products, they are relatively simple to understand and much easier to apply for. However, many people are unfamiliar with the borrowing terms and how the fees and interest rates are worked out, which is why we introduced our quick and easy free online bridging loan calculator tool.”

The main difference between bridging loans and most other types of secured mortgage products is the length of time that funds are required. A mortgage, whether taken out for residential or commercial purposes, will typically be repaid over a 10, 15, or even 25-year period, whereas a bridging loan will usually be paid back within 12 months or less.

With a mortgage, the interest is calculated and charged annually, and the cost of borrowing can be tremendously high if the repayments are spread over many years. However, with bridging finance, the money is repaid much more quickly, which means the amount of interest a borrower can expect to pay is significantly lower.

Working out the cost of borrowing

“If you are thinking of applying for a bridging product, then our user-friendly online loan calculator will provide a quick and reliable insight into how much everything will cost. Unlike a residential or commercial mortgage, repayments are not usually made on a month-by-month basis. Rather, the borrower receives a net sum, which is typically paid back in full at the end of the loan term with any interest charges and additional fees rolled up and added to the remaining balance. Please note that when using our online bridging loan calculator, the maximum LTV amount is 75%. If you need to borrow more than this, then you will need to contact one of our brokers for an accurate cost.”

Bridgingloans.co.uk is a fully regulated, independent bridging specialist with full market access and the ability to source additional funds from an exclusive panel of lenders who will consider any application based on its own merits. In certain instances, Bridgingloans.co.uk can also act as a principal lender if deemed necessary. All products are competitively sourced in order to provide the lowest possible interest charges and the least significant fees.

Whether you are looking to buy a new home or business property, invest in a buy-to-let venture, or cover the cost of urgent repair or refurbishment work, Bridgingloans.co.uk can save you time and money with a fast, reliable, intelligent, and affordable borrowing solution.

Bridging Loan worth £6.2m Arranged for Experienced Residential Developer

Recently, we were approached by a business introducer who was trying to raise funds for an experienced Scottish property developer who, in turn, was struggling to find a competitive short-term finance deal so that he could realise a lucrative build development project.

The developer had already purchased the land and had also been given the green light in terms of planning permission, yet he found himself unable to obtain the additional (and not insignificant) funds needed to finance the building itself.

Owing to the vast scale of the project and the high loan-to-cost ratio, many bridging lenders were unwilling to consider the application, especially as an existing bridging loan, which was used to purchase the land, was nearing the redemption stage.

This meant that the developer faced the highly probabilistic reality of having to sell the land to a competitor in order to honour his existing financial commitments.

The initial request was for a finance package that was to be rolled out in three stages. However, we decided that it would be better to restructure the application so that every aspect of the development funding was combined into a single package.

In order to make the prospect more appealing to our exclusive panel of investors, our team devised a new application that focused on the number of off-plan flats that had already been sold, the level of interest shown by other prospective buyers, and the borrower’s high level of commitment and existing investment in the project.

We also took steps to show how the costs would reduce as the various stages of the build were completed.

Our efforts paid off, and within just two weeks, we managed to secure a loan amount of £6.21 million, which meant that the project could go ahead without any delay or further complications.

The investor we sourced for our client offered a revolving facility for the full £6.21 million amount, which was approximately 65% to 70% of the gross development value. This covered the full cost of the initial construction phase, which delivered 48 high-quality luxury flats within the first 10 months.

The interest charges and administrative fees were subsequently rolled up and added to the overall cost of the loan.

As the build progressed, the developer had the option of refinancing the original deal in order to take advantage of a cheaper rate once the first stage of development was complete.

Any finances owed to the lender are paid back by means of pre-sales and completed sales, and these funds are then made available to the borrower again in order to finance the end stages of the project.

“When most other bridging specialists were telling me my borrowing options were practically non-existent, UK Property Finance defied my negative expectations and found an appropriate funding solution that was fast, flexible, and realistically affordable. Although we still have another 8 months left before the project is complete, the end goal is now firmly in sight, and the remaining flats, many of which we have already sold, are almost finished.” – Our satisfied property developer client has asked to remain anonymous.

We are glad to report that both the lender and the client are extremely happy with the solution that we devised!

To find out more about our services as a provider of unique bridging loan solutions, please use the contact form provided on this website. Alternatively, speak to us directly on 0116 402 7982.

Promising Yields Prompt A New Wave of Interest in Property Investment

In an era where most savings accounts are offering consumers impossibly low rates of interest, more people than ever before are looking into alternative savings and investment options. On the plus side, the lowest interest rates in recent history are opening up endless possibilities for those with an interest in property investment. What’s more, demand on a national basis is allowing property investors to generate extremely healthy returns, far above and beyond those of most conventional savings and investment options.

Bridgingloans.co.uk is one of the UK’s leading service providers, helping to fund these investment opportunities with specialist funding solutions.

Up and down the country, recent months have seen a significant spike in interest from investors in the purchase of quality property inventory for the purposes of residential lettings. Particularly in areas of the country where purchasing a property simply isn’t a realistic possibility for most, demand for quality rental properties is nothing short of explosive.

“Residential property is still in high demand, with lettings at an all-time high,” commented Russell Martin, managing director of Finance 4 Business.

“Especially in [the] South East of England, it is extremely difficult for first-time buyers to get on the property ladder.”

“Taking advantage of the low-interest rates on offer, investors can let out property, producing higher yields than those of bonds and property funds.”

Traditionally, while property investment may have represented an attractive prospect, many have found themselves out of the running for financial reasons. In many instances, conventional banks and lenders are of very limited value when it comes to buy-to-let property investment. Complicated loans with binding long-term agreements, excessive delays, and enormous rates of interest have made the buy-to-let market difficult for most to access.

However, the rise in alternative financial solutions specifically tailored for such purposes is allowing more interested investors than ever before to gain access to the market and take home potentially impressive returns.

“With many new lenders, financing opportunities, and products for prime and adverse investors, liquidity is not such a major issue,” Martin continued.

“Investors are far more savvy following the financial crisis; therefore, they can manage a portfolio better than before.”

“Many see property as a way of making good returns; hence, you are seeing a wave of new investors in this sector.”

While property investment and letting aren’t suitable courses of action for everyone, there are thousands up and down the country for whom this approach to investment could represent an ideal secondary revenue stream. And of course, for those already in the property letting game with a growing portfolio, there has never been a better time to consider expanding further.

The current low interest rates are expected to remain for the immediate future, though they will certainly not be around forever. As such, those interested in taking advantage of this golden era for property investment are advised to do so sooner rather than later.

The team here at UK Property Finance can help advise on the most affordable and accessible financial solutions for your needs; we’re waiting to take your call.

Tax Changes and Brexit Could Devastate Buy-To-Let Market

According to the chairman of the Conveyancing Association, the effects of the recent Brexit result, along with the government’s decision to introduce new anti-landlord tax policies, could easily produce some serious negative consequences in the buy-to-Let marketplace.

Of course, the full effects of the Brexit result remain to be seen, but the government’s decision to clamp down on tax relief for buy-to-let mortgages while introducing a 3% rise in stamp duty tax has already convinced a number of landlords to turn their backs on new property investments.

In terms of the figures, a recent report by the Council of Mortgage Lenders showed that the amount of money borrowed by landlords had fallen by over a fifth when looking at the year-on-year results for July.

When asked about the current situation, the Conveyancing Association chairman, Eddie Goldsmith, had the following to say:

“I think many would agree that it’s been rather more than a traditional, seasonal drop-off over the summer, the impact of the stamp duty changes for additional properties has been sizeable, and we’ve seen considerable falls in buy-to-let purchase activity, although remortgaging has improved.”

Although much of the damage has already been done, Goldsmith concluded that, although the chances were slim, the housing market could easily be brought back to life if the government decided to reverse these new buy-to-let tax policies in the autumn.

All is not doom and gloom

On a more positive note, the CEO of www.reallymoving.com, the highly successful conveyancing comparison website, had the following to say:

“The impact of Brexit on the UK conveyancing market was quite dramatic in the short term, but it now appears to be back to normal.”

He additionally stated that although the average number of transactions had fallen by ten percent on a national level and by almost thirty percent in London, prices now seem to have stabilised.

Light at the end of the tunnel

So what can be done if we want to see an improvement in the number of landlords investing in buy-to-let properties?

Eddie Goldsmith says that a white paper is soon to be published that will detail new ways of tempting landlords back into the market. By encouraging lenders to cut back on the amount of red tape that borrowers face while reducing the number of queries involved with each transaction, the cost and delay associated with borrowing could be reduced significantly.

Bridging Finance Is Gaining Popularity

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.

£3.5 Million Re-Bridge from UK Property Finance

A client with a number of London-based properties in his real estate portfolio recently approached us for bridging finance in order to fund the purchase of a large office building in the Birmingham area, which he planned to refurbish before selling on for a considerable profit. In order to get the lowest interest rate on the loan, our client managed to raise £3 million using his residential flats in the capital as collateral. Around 8 months into the bridging loan, with 15 weeks to go before the end of the loan term was reached, we called the client to check that everything was on track, which is when we discovered that the agreed exit strategy had fallen through owing to unforeseen circumstances.

As leading bridging loan experts, we set about sourcing an alternative finance plan, which our client could use to settle the outstanding debt plus the associated borrowing fees. The London-based flats that the client had used as security were in a prime location, and with rates being an important aspect of the refinancing solution, we knew exactly who to approach for the required funds.

Within less than a week, we were able to source a new 12-month loan with low borrowing rates and a value of £3.4 million, which solved all of our client’s problems at once while affording him sufficient time to repay the new debt while completing the sale of his recently refurbished commercial property. Both the lender and client were highly satisfied with the new terms, and our client made the profit he was looking for without losing the properties that he provided as security in the first place.

UK Property Finance has a long-standing relationship with many property investors and excellent customer feedback from our clients as a whole. We pride ourselves on only offering the very best levels of service, and we achieve this through the commitment of our staff and the high standard of lenders with whom we choose to work.

UK Property Finance is a “whole of market,” directly FCA-authorised and regulated master finance broker specialising in bridging loans, development finance, and commercial finance. Our “Whole of Market” broker status enables us to source bridging loans and development loans from any lender in the market, enabling us to provide the very best rates.

Bridging Mortgage

Within the formal written offer of a bridging loan, the loan is often referred to as a mortgage. The reason for this is that there are many similarities that occur between the two, and in essence, they are basically the same thing.

Bridging loans are secured as a charge on commercial and residential property or land within the UK in the same manner as a mortgage.

Some of the main differences, however, are:

  • Bridging loans can be obtained without the requirement to make monthly payments, whereas with a standard mortgage, monthly payments are always required (this does not include an equity release mortgage, which is available only to those over 55). The less stringent income requirements allow bridging loans to be taken by clients who, for whatever reason, cannot show or prove the income needed to make monthly payments. Possible reasons for this lack of income proof could be because the clients are retired and are in the trap of being? cash-poor but asset-rich, the client is self-employed but without proper proof of income, the client has a minimum income, but the reason for the bridging loan will put them in a better financial situation, etc.
  • The maximum term of a regulated bridging loan is 12 months (18 months for an unregulated loan), whereas with a mortgage, the standard minimum term is usually 5 years.
  • Credit blips can be acceptable for bridging finance, provided a suitable exit route is proved, whereas only very minimal adverse credit is acceptable for mortgage finance, and only with a very small selection of lenders.
  • Mortgages are virtually always taken on a 1st charge basis and on one property, whereas bridging finance is much more flexible and can be attained as either a 1st, 2nd, or 3rd charge and on multiple properties if required.
  • Bridging finance, in certain circumstances, can be used for the purchase or refinance of partly completed and/or defective properties as well as land with or without planning, whereas a mortgage, with the exception of niche products such as self-build mortgages, is virtually always used for the purchase or refinance of fully habitable properties, which include those having kitchens and bathrooms.
  • Bridging finance is often used for a wider range of loan sizes, starting at L10,000 and with no limits, and also for a much wider range of uses and scenarios.

The main consideration of any lender before allowing a client to take out a bridging loan is how the money will be repaid. Only if lenders are fully satisfied that the exit route is genuine and plausible will they allow a loan to commence.

Large Bridging Loans

UK Property Finance has today completed one of its largest bridging loans to date. The multi-million-pound funding was required to purchase a large repossessed new-built office block complex in the centre of a major UK city. Our client, a recently formed offshore limited company, had a successful bid for the property at auction some 2 weeks prior to our contact and managed to purchase it at less than 1/3 of the marketed asking price being requested prior to the property being repossessed.

Since paying the required 10% deposit, our client has come to realise that he had been strung along for 2 weeks by his long-term and previously trusted mortgage broker, who was unable to locate the balance of the funds needed to complete the purchase in the 28-day time frame required, despite being so confident at the beginning that he could do so. Our client now understood that he needed focused and specialist help to prevent a default on the purchase agreement, a possible loss of his deposit, and, more importantly, a loss of his bargain property.

A trusted family business acquaintance, bridgingloans.co.uk, had been recommended to our client due to our no-nonsense reputation of being open and honest at all times and always doing the utmost to do what we say. After an initial telephone conversation, we located a lender who agreed to supply the funds required for the purchase in the timeframe needed and at an excellent rate, which was much lower than what our client had been quoted previously and seen advertised elsewhere. We emailed the basics of the deal back to our client, including details of a substantial discount we had managed to negotiate in the arrangement fee, and as such, the client subsequently gave us the authority to act on his behalf.

To get the best possible rate, we advised the client to secure the purchase funds required against other owned property rather than the office complex. Our client had a large portfolio of prime central London residential investments, which would be more interesting to a wider range of lenders and would give us more choice and ability to negotiate the best possible deal with the lowest fees, etc. We secured a first charge on one property and a second charge on another.

We completed all the paperwork required to transact the case and emailed this to the client. Due to the tight time frame, the client immediately completed the paperwork, emailed it back, and on the same day, we forwarded this emailed paperwork to the lender, who at the same time instructed the valuations. As the reputation and standing of bridgingloans.co.uk are so strong, the lender was able to process the case through to offer by using the emailed documents only. The case was completed just in time, and although one issue occurred during processing, we used our high-level contacts within the lender organisation to ensure that the problem was quickly and efficiently dealt with.

We will be arranging the long-term commercial mortgage finance for the client so he can repay the bridging finance as required, and also because of the performance of our team at UK Property Finance, we have been asked to look at two more bridging loan projects for the client.