Funding an investment purchase was the most popular use of bridging finance whilst the number of first charge bridging loans increased as buyers rushed to complete purchases.
The bridging finance market is now unrecognizable from the sleepy market it was until a decade ago. A wave of tech-powered, regulated and innovative lenders had disrupted the market well before COVID-19 hit while last year’s pandemic and the subsequent booming property market have proven to be the moment bridging finance was made for.
As restrictions and fiscal measures ease, it’s worthwhile taking a look back at how the pandemic has changed the housing market and what ‘complex’ now means in specialist lending.
We have seen a notable number of investors purchasing a property owned by a relative. This often comes with the added benefit of being able to land that property at a price below what they may have paid if purchasing from a stranger if purchasing through the regular process.
Islamic Finance uses several structures in providing alternative financing products. For most conventional products, there is an Islamic finance alternative. Term financing is no exception.
Research of more than 200 small to medium enterprises (SMEs) which have taken out external funding in the past 12 months shows almost half (47%) don’t understand what a personal guarantee (PG) is.
There was a time when the bridging market suffered from something of a ‘one-size-fits-all’ approach, where there was little distinction between the products on offer beyond the headline interest rate.
While the housing market has been resilient throughout the pandemic, there is reason to believe that the year ahead will be even stronger, especially within the new-build sector.
Conventional financing products are largely interest-based lending and therefore are not compatible with Islamic finance.