Tag: Regulated Bridge

Clever Lending packages regulated bridge for complex holiday let development

Posted on | by Damien pepper

Clever Lending, the specialist finance packager and master broker, has announced that it has recently packaged a £180,000 regulated bridging facility for a broker’s clients who wanted to develop residential outbuildings they owned into holiday lets.

The residential property was unencumbered and valued at £2 million; however, the clients were looking to split the title after the development was completed, separate out the three-bed detached bungalow also on the land and remortgage it as the exit strategy.  

Matthew Dilks, commercial and bridging specialist at Clever Lending, placed the case with West One Loans as he recognised it was the only regulated lender that would consider the commercial and residential mixed-use security. 

Clever Lending worked quickly and closely with West One as the clients needed a quick completion on the bridging loan. Various obstacles had to be tackled in order to meet the tight deadline.

There were some delays with the valuation report as the surveyor discovered that there was an equestrian facility on site. In addition, the fact that strawberries were growing on the site meant that the valuation needed to be based on a specific type of land. However, as a gesture of goodwill the lender kept the valuation fee the same to prevent the clients from incurring any extra costs.

In addition, during the client application process the Bank of England increased the base rate which in turn saw the lender’s rate rise from 0.95% to 1%. As a consequence, West One increased the gross loan amount to ensure that the clients would receive the initial net loan amount they required.  

Having overcome all the issues, the case was completed within two months of submission on 21st June. The regulated bridging loan was for 12 months at a loan to value (LTV) of 15%.

Matthew Dilks, commercial and bridging specialist at Clever Lending, commented:

“This case highlights the many benefits of dealing with a master broker. Following the clients’ specific requirements, we used our considerable market expertise to place the case with the only lender willing to accept mixed-use security with a regulated bridging loan.

“We were also able to work closely with the lender and other third parties to deal with the particular issues that arose during the application process.

“Clever Lending is known as a firm that gets difficult cases successfully completed and this was no exception.”

Jez Quinn, Head of Sales (North) at West One Loans, added:

“It’s always a pleasure to work with the team at Clever Lending and I’m delighted we could support their client with this transaction.

“I look forward to working with the team on their next deal.”

Regulated Bridge – Chaos breeds opportunity

Posted on | by Damien pepper

By Matthew Dilks, Bridging and Commercial Specialist, Clever Lending

It is often said that out of chaos, comes opportunity, and that is certainly true of the bridging sector. This area of the specialist lending market has seen substantial growth amid the global and domestic uncertainty of the last few years, with enquiries up 64% in the first three months of 2023, compared to the final quarter of 2022, according to recent figures from Bridging Trends.

 

Navigating Challenges with Short-Term Financing

Regulated bridging in particular has seen a surge in popularity, accounting for 46% of all bridging transactions in this time, as awareness of the sector continues to increase with both brokers and residential homeowners starting to acknowledge the benefits of using short-term financing to help them navigate the challenges of buying a property in the current economic climate.

While recent media reports of rising interest rates and a faltering housing market have certainly been plentiful, talk of the market’s decline are somewhat alarmist. Consumer appetite for buying a property remains high and there will always be a need to address the home financing requirements of residential consumers.

Admittedly, the current volatility in the mortgage market coupled with the squeeze on income due to the cost of living crisis is presenting some challenges for those customers looking to refinance, but the needs of consumers do not stop just because market conditions are considered to be less favourable.

The Role of Regulated Bridging Loans

In fact, navigating these obstacles is certainly achievable and short-term financing solutions such as regulated bridging loans are increasingly being used to help bridge the gap between buying and selling a property and for chain break purposes.

The use of regulated bridging for chain purposes alone is now the most common reason why consumers take out the product and accounted for 25% of all transactions in Q1 2023 according to Bridging Trends, a jump from 15% on the previous quarter.

This uptick in demand is unsurprising as using a bridging loan for chain break purposes allows homeowners to quickly raise the funds needed to circumvent the problems associated with property chains as it enables them to purchase a new property outright before repaying the loan when they sell their existing home. 

This can help to provide surety around the property purchase and help to prevent the costs and delays that can sometimes come with a sale falling through. It can also help to prevent the buyer having to sell their current property at a lower price simply to ensure the sale goes ahead.

A regulated bridging loan is also a useful tool for brokers with clients looking to downsize, as it provides them with the opportunity to unlock equity in their current home and use the cash to purchase a smaller property without the pressure of being rushed.

It also offers the client the freedom of being able to choose when to sell their current property, rather than reacting to the changes in an increasingly volatile economy. This can prove extremely attractive to those who want to move on their own terms and not feel rushed into making a decision.

The speed at which the funds can be released also makes regulated bridging products an attractive proposition in an ever-changing market as they allow consumers to move quickly as applications are often processed in a matter of weeks. In all cases, the client will need to have a clear strategy for exiting the loan, which is often the sale of an existing property.

 

Guiding Clients with Specialist Support

Brokers unfamiliar with this area of the market, but with clients who could benefit from a regulated bridging loan, can refer clients to specialist master brokers such as Clever Lending who can guide you through the process and help you navigate this growing area of the mortgage market while continuing to meet the needs of clients.