As many banks continue in their refusal to lend – or lend at phenomenal stress testing levels – we are finding that brokers have to think outside the box.

For example, we have seen a major increase in bridging finance being used for development purposes. An experienced developer knows exactly how long a build will take and can therefore work out his costing very accurately.

A developer will know that with the right security being offered he can secure bridging finance very quickly, with rates varying from approximately 0.75 - 1.5% a month depending on LTV and loans available up to £5,000,000, he can complete the build quickly and move on to his next project.

Bridging lenders will always look for the exit strategy in a case, however most experienced developers have pre sale agreements in place or sale exits established for their developments.

Additionally, we are seeing bridging lending being used much more within the auction rooms or for standard house or business purchases, with the housing market appearing to have bottomed out many are seeing an opportunity to get the finance quickly to enable them to get the property at the right price.

Another advantage many brokers find is that bridging works against an open market valuation as opposed to a forced 90 day valuation. This enables the purchaser to acquire more finance against the required property, then once they have the property they can look for more conventional finance to replace the bridge.

At Alfa Financial Ltd we are finding that the bridging loan has increased in demand and still provides a product that the prudent speculator can take real advantage of.

For more information on bridging or development loans contact Alfa Financial on 01625 610 444

www.alfafinancialonline.com