House prices are rising at a steady rate as a result of sustained market demand. According to Nationwide’s house price index, the average UK house price has increased from under £150,000 in March 2009 to approximately £211,000 in March 2018.
For seasoned investors – or those looking to take advantage of a lucrative business opportunity – managing a portfolio of one or more properties can also offer greater flexibility, particularly when it comes to developing a specific financial strategy. Bridging loans are just one example, giving investors the opportunity to use an existing property they own as security to access fast capital.
However, as demand for real estate outweighs the available housing stock, the property market has become a competitive industry. New statistics have revealed that the number of house sales falling through before completion has risen to 38.8% in Q1 2018 – nearly four percentage points higher than a year earlier, and an astounding 18 percentage points higher than five years ago. While the competitive nature of the UK property market is well known, this marked increase in failed house completions is a reflection of a broader challenge currently facing prospective homebuyers.
- MFS expands lending team by 30%
- 53% would rather invest in traditional asset classes
- MFS completes £3m re-bridge in under five days
In 2017, Market Financial Solutions commissioned a nationally representative survey across more than 2,000 UK adults to understand the key factors inhibiting the successful completion of a property purchase. Importantly, the survey found that that deals were most likely to falter because of the availability of funding, with prospective buyers aged between 18 and 34 most vulnerable to financial problems.
Of all the considerations to take into account, access to the capital needed to complete on a property purchase is a key priority. Failing this, there is a real chance of missing out on a real estate opportunity, particularly at the critical stages of exchange and completion. The imposition of stricter lending measures from high street banks – coupled with a potential interest rate hike over the coming months – has made the mortgage lending landscape all the more complicated to navigate.
Therefore, for those looking to take advantage of an upcoming property investment, it is important to consider the full range of financial options available. The UK’s established position as a global financial capital means that investors can access a diverse range of tailored solutions suited to their needs – ranging from mortgages to alternative finance avenues such as bridging. The challenge, however, is finding a tailored solution suited to an individual’s specific needs.
To overcome this challenge, be sure to consult with brokers backed by extensive experience and who have access to a diverse network of lenders from both the mainstream and alternative finance sectors. Through this approach, a package can be offered which ensures a buyer has access to the capital needed to successfully complete on their next property purchase.