ness operated from several sites. Acquiring property is essential to
many of the customers looking for com- mercial loans and there are certain prod- ucts that assist in the process. Specialist lenders will now consider a
range of residential and commercial property types as security, as well as different income sources and credit profiles. This approach has opened up the mar-
ket and increased the potential finance solutions brokers can offer. In addition, specialist lenders have
responded to market conditions and introduced new products that support property investors’ needs to develop their portfolio.
The rental boom House prices fell by just over 1% in 2011 and Halifax believes this will continue through 2012. With traditional lenders still restrict- ing lending to many first-time buyers, people are finding it trickier to secure mortgages. This backdrop is driving the demand
for rental properties, pushing up rental prices and making the current housing market a hotbed of opportunity for brokers. Property investors wanting to take
advantage of lower house prices and higher rentals will need a cash injection to progress the opportunity immediately, which is where bridging finance is the perfect tool to gain finance.
The bridging boom With the current restricted approach to lending from traditional sources fur- ther fuelling the buy-to-let boom, there are a lot of opportunities for bridging provi ders to supply this continuing demand.
In the next 12 months we may see a
degree of common sense return to the marketplace. Moving forward, we could continue to see companies settling into niche areas
The
in the market, such as different sectors or simply the size of the loan. In the past, lenders have reduced rates and cut profits to compete with each other, which isn’t sustainable in a crowded market. Operating within smaller areas allows lenders to continue to grow without sac- rificing revenue. Whether it is based on customers’ demographic profile, geo- graphic area, the maximum LTV, mini- mum and maximum loan amounts or overall risk, they will look to own their own space.
The right products Lancashire Mortgage Corporation has launched products and revised criteria to offer brokers increased opportunities and to process cases more quickly. The products are intended to simplify plan selection and provide more guid- ance for approving commercial lending without referral. This will increase the speed of applications and the potential customer base for brokers. As part of its plans, Lancashire Mort-
gage Corporation has launched a pre- approved auction purchase product, meaning customers can bid on property at auction with peace of mind. It also includes a purchase valuation
bypass, meaning no valuation is needed for properties under £150,000. The process for approving loans will
be faster and accessible to a wider range of customers and ensure the quickest turnaround time when it is most valuable.
So it looks as though the demand for bridging finance should remain strong throughout 2012. Bridging is a product that should be
part of any broker’s portfolio as well as secured loans and mortgages, both resi- dential and commercial. It isn’t the saviour of secured lending,
but it does make up an essential portfo- lio of products that should be available when appropriate.
www.blemaingroup.co.uk guide to Bridging Finance 2012 15
GUIDE TO BRIDGING FINANCE
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