The total size of the regulated bridging sector was estimated at £4bn in 2016, up from £1bn at the time of the financial crisis in 2007. Increasing uncertainty and rising house prices have driven up demand for more flexible financing solutions, and for those looking for short-term access to funds, bridging loans can be a good solution.
Bridging loans are used for a variety of reasons, by everyone from homeowners to businesses. Homeowners often use bridging loans when selling their house to purchase another; a bridging loan allows them to purchase a house before having sold their own one. This can be especially helpful to those buying at auction or downsizing.
Property developers may also use bridging loans, when renovating properties or purchasing a property that wouldn’t qualify for a normal mortgage. Bridging loans provide quick access to funds so that property developers or investors don’t miss out on good opportunities. This also attracts businesses needing speedy access to funds for tax or business obligations.
The biggest advantage to bridging loans is the speedy access to funds. If you’re looking for a short-term financing solution, a bridging loan can provide the flexibility that you need, when you need it.