Roger Morris - Group Distribution Director
Although I’ve been extolling the virtues of bridging finance for some time now, it’s still viewed with suspicion in some quarters. Even though it’s come a long way in the last decade or so and is now rightly recognised as offering a flexible short-term borrowing solution in a wide range of situations I still often hear brokers tell me “it’s too expensive”, or “it’s too complicated”, and sometimes even “it’s too niche”.
So for this blog, I’m going to dispel these lingering, out-dated myths by showing you one of the ways it can be used simply and effectively – chain-break finance.
According to the latest figures from HMRC1, there were 129,400 residential property transactions in December – nearly a third more than the same month a year earlier and 13.1% more than the month before. That’s quite an increase.
It’s undoubtedly down to two things – the Stamp Duty holiday and the demand which had built up over the year working its way through the system. There’s just one small problem, the surge in demand has created a bottleneck.
This is where bridging finance could help. By taking out a bridging loan, a customer can bypass a long and slow-moving chain, and it can even help if a potential buyer of their current property has withdrawn and the chain has collapsed.
By giving them the option to stand outside of the chain and purchase their dream home, you’ll also give them more control over the time and date they want to move house. That’s incredibly liberating.
With access to our dedicated Bridging Finance team who can assist you through the process, most cases can be completed quickly and efficiently with minimal fuss. And with rates from as low as 0.49% per month and interest charged on a daily basis, your customer may be pleasantly surprised at the cost.
Our Bridging Calculator gives you an indication of how much your customer could borrow, as well as the costs involved including the gross loan amount that will need to be repaid at the end of the term.
I should mention that bridging finance is not the solution for everyone and making sure your customers get the best advice for their individual circumstances is crucial, but it should still be an important part of your toolkit. Not only will you have an increased range of tools at your disposal, your customers will have access to a product which could free them from the dreaded property chain.