If the thought of debt consolidation leaves you somewhat confused, scratching your head in search of meaningful answers, then you are not alone. It’s a sad fact that the vast majority of us are simply unable to get from one week to the next without some type of borrowing or credit line, whether it’s a mortgage, a string of credit cards, unpaid items from the catalogue, or even a dreaded payday loan.

Of course, when you break it down to the simplest level, there are two types of debt that most of us get into. These are the debts we can realistically afford to repay, and the debts that have seemingly spiralled way beyond control that we simply don’t stand a chance of paying back on time.

What is a debt consolidation loan?

Debt consolidation loans are a relatively new type of borrowing product aimed at reducing your monthly outgoings by lowering the interest rate on existing credit and extending the repayment period as an additional means of helping you budget. With debt consolidation, the idea is to simplify life without causing any unnecessary confusion.

As a useful example, let’s consider an employee at a bank who has taken out a personal loan, makes regular, and sometimes unauthorised, use of his overdraft facility, and also has a couple of credit cards that he likes to use to keep himself afloat until the next pay check arrives. With these three credit lines alone, our friend at the bank has a total of four finance products to juggle each month, and the interest rate and charges are an additional burden that he has to deal with.

With a debt consolidation loan, it would be easily possible to pay off the overdraft, settle the credit card debts, and simultaneously make a substantial repayment on the personal loan, which would help save money while also providing an additional safety net with any funds that are left over. Whereas the previous debts were costing £250 a month with an average interest rate of ten percent, the debt consolidation loan costs just £75 per month to keep on top of, and the interest rate has been reduced to around 4.5%.

Although the consolidation loan might take a while longer to pay off, our friend is already enjoying some substantial savings on his debt, both now and in the foreseeable future.

Secured vs. unsecured debt consolidation products

If you have the required assets, a secured consolidation will probably be the best way forward. Secured borrowing products are always the more affordable option, as the lender has the added assurance that, should the borrower default, the debt will be paid back in full through the sale of any agreed assets used as security. This results in larger loan amounts being made available with less stringent borrowing criteria and longer repayment terms.

Unsecured consolidation loans are typically only available to applicants with a good credit rating. However, if you are struggling with your debts at present, the chances are that you will have missed one or two repayments in the past, so this type of borrowing product might not be available to you.

As well as consumer debt consolidation loans, there are also several commercial loans available for the consolidation of business debts. If you run your own company and are looking to reduce or lower your debts while freeing up finances for other areas of your enterprise, then a commercial debt consolidation loan could well be in your best interests.

The UK’s decision to leave the European Union has placed a great deal of uncertainty on Britain’s economic future. No doubt, this will lead one group of investors to prosperity while causing serious grief for another, particularly where the property market is concerned. To call Brexit a potential dividing line between financial success and failure for the many different types of property investors is something of an understatement, particularly where the UK housing sector is concerned.

Of course, whether the Brexit vote results in a dramatic win or a substantial loss from your own perspective will ultimately be decided by which side of the fence you have found yourself on.

Recently, the Nationwide Building Society published a report that indicated another fall in UK house prices, with most properties experiencing a drop in value of around 0.4%. This is the largest monthly fall in half a decade and the second drop within two consecutive months.

The blame for this has been directly linked to higher inflation and a notable fall in consumer spending, which have also combined with Brexit, along with a drop in GDP, to make matters worse for UK homeowners. Of course, this is not the ideal scenario for anyone looking to secure the public vote in the next election.

Both sides of the coin

The fact that house prices are falling is particularly concerning, especially when one considers the fact that UK mortgage rates are still at an all-time low. With UK unemployment also at a record low, most experts would predict that the housing market should be boosted in strength, with prices steadily increasing.

However, this is not the case, and this has meant that a large percentage of property investors and homeowners have had to sit back while their valued investments have depreciated before their very eyes. Again, this is good news for some and bad news for others.

For first-time buyers, the drop in house prices will obviously prove to be something of a major advantage. However, long-term property investors and existing homeowners will not be impressed with the status quo, although the worrying trend is expected to revert in the not-too-distant future.

Provided the Brexit vote proves to be less of a disaster than initially envisaged and the next general election ushers in a new term of government that helps the country get back on its feet, house prices could easily start to rise again at accelerated levels, although this could spell the end of the record-low mortgage rates that many investors have been taking advantage of.

Whatever actually happens next is anybody’s guess, so it stands to reason that it isn’t really in anyone’s best interests to take anything for granted in the UK housing market in the next 12 months, particularly when we consider the previous year’s events.

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.

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.

Link Lending has announced it has secured another £50 million of additional funding from Deutsche Bank in addition to the bridging loan funding it has in place with Barclays.

The move was a clear signal that Link Lending’s strategy is to continue to grow its lending volumes in response to big demands for its bridging loan services. Short-term lending is a fast-moving sector, so it’s important that any lender can quickly deliver additional funds if needed. Some lenders rely on other bridging loans closing down before a new fund can be released.

Bridging loans have grown in popularity over the past few years as more and more consumers are opened up to the potential of such loans for short-term lending needs. Often, the spate of property programmes on TV has made people consider taking out bridging loans for building projects or other bridging projects as needs arise. If all requirements are taken into consideration, then bridging loans can be very useful in such circumstances. It is always worth asking the advice of a consummate professional when looking for bridging advice.