Richard Tugwell

The current economic climate has increased demand for fast, flexible finance




As the Brexit saga rumbles on, the housing market has continued to dampen, with the number of mortgages written for house purchase falling to 64,300 in February — down 2,500 on the previous month — according to the latest Bank of England figures.

What seems to be a general trend in the current property market is for homeowners to stay put, maybe choosing to release smaller amounts of equity in the property they’re living in for projects such as kitchen and bathroom renovations in a bid to add value to their homes.

Figures from Bridging Trends — a barometer of the short-term finance market — revealed that property refurbishment was the main reason for people using this type of finance last year, increasing to 28% from 23% the previous year.

The current economic climate has meant that demand for fast, flexible finance is increasing and bridging could be seen as a key growth areas for brokers. In one example towards the end of last year, we helped a broker’s client secure finance through a regulated bridging loan.

The borrower had applied for the loan for home improvements in a bid to boost the value of her home and to pay off £10,000 of existing credit.

Specialist distributor Clever Lending brought the case to Together because its customer needed a speedy and efficient service. We looked into the case and carried out a desktop valuation of the customer’s house before agreeing the 12-month, short-term loan of £25,000. It was offered at a rate of 0.49%, one of the lowest in the market.

The loan was secured against the customer’s unencumbered three-bedroom 1930s detached home, which was then put on the market. Following the completion of her refurbishment project, she expected to sell it for about £270,000 to exit the short-term loan and move to another property which she owns nearby.

This was a great outcome for the customer. After paying off all her existing credit, she has £15,000 to carry out improvements, hopefully adding to the value of her home.

We received the case on a Thursday, and it was so expertly packaged that it made it easy for our residential underwriters to provide the finance by the Monday, three working days later. This was a great example of when lenders work seamlessly with trusted partners to provide fast, tailored finance.

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