The opportunities for regulated bridging

In H1 2018 Clever Lending has increased funding on regulated bridging by 295% compared to the same period in 2017.

There seems to be several factors at work here that have combined to determine these results.

A key reason for most regulated bridges is delays with a traditional mortgage provider taking too long to complete the mortgage where the time frame for purchase is short. This can be when a property is bought at auction or the customer is in a house chain but doesn’t want to lose out on the home they really want.

Delays can also occur when the property being purchased needs to be renovated to bring it up to the standard traditional lenders require. Usually this has to happen before the mortgage lender will release funds, with regulated bridging then providing the route to a quick purchase to bridge the gap.

For brokers and lenders the exit route for the bridge can also be pre-planned as often the bridge is accounted for in the sale of their current property when there is enough equity to do this. So it can be useful for lenders to know they’re minimising exposure as there is a repayment plan in place, making it a good way of assisting families to finance the purchase in a two stage process.

We can put down our growth in regulated bridging enquiries to a number of other reasons too. There’s definitely more awareness amongst brokers about the regulated option for their customers, but there are some who aren’t qualified to provide the advice.

We’re actually set to launch our own in-house regulated bridging service really soon, so once this is available, bridging advice can be handled by us to open up access to this valuable and useful form of finance for brokers.

The other key point is that specialist packagers have access to a large range of panel of lenders with slick processes to deliver the finance quickly, and an extensive suite of products to cater for most profiles of customer and property types.

Even though regulated bridging can be used to purchase a property for a family to occupy, rates in the market are decreasing, making it an attractive option and certainly one of the factors in fuelling the growth we’ve seen compared to previous rates in the market.