Nicola Firth

Brokers search for maximum borrowing




For brokers advising on bridging loans or commercial mortgages, it is all about maximum borrowing at the moment.

Criteria searches on Knowledge Bank reveal that for both bridging and commercial, terms such as ‘bridging maximum term’ and ‘maximum LTV’ feature highly.

Whether borrowers actually end up getting the maximum borrowing available is a different matter, but it is clear that, at the outset of the process, this is what they are looking for.

One difference in bridging in September was that brokers were also searching for bridging lenders who provided second charge loans. This has only occurred twice before in the 15 months that we have been running this index. This is clearly on the same theme of borrowers wanting more money, perhaps to top up an existing loan.

In commercial mortgages, on a similar theme, alongside ‘maximum LTV’ ‘maximum LTV for a trading business’ has made the top five broker searches for the first time. It would be interesting to know if this search relates to business owners who are looking to buy their own business premises or perhaps invest in other premises as a further investment in bricks and mortar. It could well be that during these uncertain economic and political times, when interest rates are so low, that investment in property is seen as a solid home for business cash. It could also be that, as with many of today’s residential renting population, a growing number feel it would be better to be paying off a property that will, ultimately, become theirs and a business asset rather than pay rent every month.

Investment is clearly the case for those searching for ‘commercial investment mortgages’. Investment in commercial property has been a theme for the whole of the past year, so while the buy-to-let arena is getting more challenging, there certainly seems to be a considerable number still looking to invest in commercial. The same is the case with semi-commercial, which was the most searched for term in September this year. It first appeared as a top five search in August last year and has become ever more popular since.

There has reputedly been a drive among a lot of specialist buy-to-let brokers to encourage their clients to consider semi-commercial in order to avoid the ever more punitive tax and financial penalties levied by the PRA. This is clearly reflected in the searches being carried out.

Ultimately, it appears that the demand for bridging and commercial remains strong, with both the type and number of searches remaining pretty consistent from month to month. Interestingly, the search for bridging lenders who lend to borrowers who have an adverse credit history dropped out of the top five this month, so while borrowers seem keen on borrowing the maximum that they can, those borrowers appear to be more creditworthy, at least according to brokers’ criteria searches.

What is positive is that there are still people looking to invest and using bridging loans or commercial mortgages to do so, and are looking for the highest amounts that they can possibly borrow.

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