Has Brexit had an effect on bridging loans so far?
By: Emma Gettings
BiG have looked back on 2016 and with only four weeks until Christmas, it’s time to assess the trends we’ve seen in the property and development industry in preparation for the year ahead.
2016 has been a successful year for bridging, even though there have been many economic changes affecting both the finance and property sectors, from Brexit to the buy-to-let tax changes. However, despite the challenges, the market has proved resilient and bridging continues to thrive.
Brexit doesn’t appear have had an impact on the success of the bridging sector that some had feared, with specialist bridging loan lender BiG Property Finance announcing it had seen an increase in number of bridging finance enquiries since the EU referendum.
Mortgage delays remained the main reason for borrowers taking out a bridging loan in 2016, with figures from the Bridging Trends Index showing that this accounted for 35% of cases. This could mean, it’s possible that the mainstream lenders’ response to Brexit will somewhat govern the vision for bridging.
It is predicted that mainstream banks and mortgage lenders may get stricter with consumers, requesting for more affordability tests , which in turn can cause delays in the property purchasing process and result in buyers wanting to have a bridging loan to secure their property.
Lenders are strong in demand this year for short-term finance, with there being a number of bridging products to choose from with competitive rates and flexible, bespoke loan packages.
According to Mintel’s 2016 bridging loans report, 2017 is expected to continue to grow, stating: ‘Bridging has provided a vital resource to those looking to secure immediate finance. The industry’s substantial growth over the last seven years suggests that the scope for innovation and collaboration between lenders and brokers will expand alongside awareness of how bridging finance can be useful in a range of scenarios, which will only increase growth potential.’
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Source: Bridging & Commerical