For landlords looking to buy, convert or refurbish a property, bridge-to-let can provide an ideal solution, by taking out a bridging loan for the short term. Once the property is ready for tenants, landlords can switch to pre-agreed terms for a longer funding solution without the need to go through the full application process again.
In the current market, demand for mortgages is rising yet extra underwriting measures have been put in place and many companies are working at a reduced capacity due to the pandemic. It has been widely reported that waiting times to secure offers have risen, with Bridging Trends data showing that the average completion time of a bridging loan has risen to 52 days. Understandably, this can be frustrating for all involved.
A alternative option is a bridge-to-let loan, which can prove more efficient for a landlord than a bridging loan with the intent to exit it with a buy-to-let mortgage. Many landlords are looking to maximise returns by purchasing property, carrying out necessary work on it and then letting it. In a recent Bridging Market Study, carried out by EY, refurbishment is the most popular reason for borrowers to obtain a bridging loan. Bridge-to-let was shown to be especially popular among investors who want to convert or refurbish property.
Barry Searle, Managing Director of Mortgages at Castle Trust, the short term, bridging finance, development finance and specialist finance provider, said: “At any time, bridge-to-let is a straightforward process that can provide investors with more flexibility and greater peace of mind than separately sourcing a bridging loan and a buy to let mortgage.
Not only does it provide certainty in an uncertain world, enabling landlords to make longer term plans for their investments without carrying the risk of being unable to secure funding at the right price once the bridging facility comes to an end.
But it also creates efficiencies in the application process at a time when capacity in the entire mortgage system is under such strain.
So, if you are looking for a way to relieve the pressure, think about bridge-to-let.”
Original article featured here…
It was recently reported that the UK housing market saw its busiest month for home buying in 10 years.