4. Bridging on the Up – Short term lending is increasing, despite pre-election jitters various statistics reported show an increase upwards of 30% on last year. This shows that specialist lenders are delivering the finance landlords and developers need when traditional routes aren’t quick enough or don’t have the criteria to lend on refurbishment projects or land without planning. It’s also interesting to note that average loan balances have started to creep up, a sign that prices are increasing maybe, but also lenders are willing to lend more with the confidence borrowers will repay. The appeal of bridging loans is broadening , for example to service businesses in need of better cash flow and to settle unexpected bills or to finance buyouts. There seems no end to the versatility of bridging finance and this will continue to develop in the next six months.
5. Buy to let Baby Boomers – With savings rates staying low for the foreseeable future, and with the new pension laws coming in to force in April, many pensioners will calculate that higher yields are achievable on rental property.
According to Bank of England figures, there was increase in buy-to-let lending over the last year, from £6.8bn in the first quarter of 2014 to £7.6bn in the first quarter of 2015. With some 60,000 pensioners utilising the new pension freedoms, some of this money will be accessed for buy-to-let. After all, with a housing shortage and not enough new properties being built, converting property to buy to lets and HMOs will continue to thrive, and the ‘grey market’ is very well placed to capitalise on this . This is all good news for specialist bridging lenders who take a commercial view on age at the end of the loan term and have the criteria to fund elderly borrowers, after all the loan is only for a limited period so risk is minimised too.
Taking all of the above in to consideration, there are enough positives in the economy to expect that for the remainder of the year, bridging finance will continue to thrive. Specialist lenders, such as Roma Finance, are ready and waiting to capitalise on this and introduce products and services to help brokers and borrowers in more new ways.
