Bidders are sold on benefits of bridging

8 March 2010

Despite increasing stability in the housing market it’s no secret that funding restrictions are still in place for many lending institutions.

So even with the promise of spring around the corner investors, landlords and potential developers still face limitations on their ability to borrow.

The question is - how are these important cogs in the mortgage wheel financing their acquisitions of property bargains in the marketplace?

The answer for many is bridging finance. We have seen unprecedented demand in the past three months and many of these customers are investors looking to the auction process to secure bargains.

Auctioning property is not a new proposition but it has recently captured the imagination of first-time buyers, bargain hunters and seasoned investors.

Zoopla.co.uk has just held its first online auction at which 57 properties were sold. The website says it will be conducting further online auctions every week from now on.

Buying at auction usually means having to operate in a limited timeframe so a bridging loan can facilitate the process. With mainstream mortgage providers still showing little flexibility in accommodating such short timescales the obstacles to getting the necessary finance in
place are obvious.

Bridging finance can overcome these problems and while it might not be right for all clients it can be an appropriate solution.