In the past bridging finance was used mainly for home movers who had bought a new home but not sold their own.  So to not miss out on their new dream home they had to bridge the gap until their own property sold. 

In more recent times bridging finance is a product that’s used widely for a diverse range of purposes, many of which we have covered in our website. 

This section of the site focusses on Residential Property Bridging Finance.  This is a popular and frequently utilised method to quickly raise funds to refinance or purchase a residential property.

It is estimated that the UK bridging finance sector is worth £4bn in the year 2016.  This has risen steadily from £750m in 2011.  This increased liquidity and appetite for risk has created many opportunities for borrowers, some of which may have not been fundable in the past.

Typical terms for Residential Property Bridging Finance can range from 1 month to 36 months with interest rates from 0.40% to 1.50% per month – the cost of funds is determined by the risk of the transaction, so borrower experience/credit history/gearing/location/exit.  The lenders products are made up of an arrangement fee, a monthly interest rate and an exit fee.  The borrower will also have to cover the cost of the valuation of the property and the legal work to complete the conveyancing process.

The monthly cost of interest can be rolled in to the loan or serviced monthly by the borrower, or a combination of both.  We see borrowers raising finance in their individual names, via a company or through their pension.  The options are flexible.

An example of a recent deal we delivered: 

  • Fund raise to enable the completion of a residential property development in the Highlands. 
    • Use of an Edinburgh based residential property as security for the funding.
    • Speed was critical, delivered in sub 4 weeks.
    • The borrower had his own funds but preferred to borrower to maintain his own liquidity.
    • 75% of the market value of the property released.
    • The pricing achieved was 0.94% per month with a 2% arrangement fee and no exit fee.
    • The agreed exit was through the sale of the properties being constructed, some of which had been pre-sold.

Contact Sean Crombie for the latest pricing, products and terms on offer by completing this brief enquiry form.