Our short term bridging loans are for purchase, refinance, property improvement or to unlock working capital for business purposes.
This unique overdraft provides you with a flexible drawdown facility giving you instant liquidity and avoids heavy setting-up costs.
Individually structured loans for residential and commercial projects, with finance available for site purchase, construction and fees, refinance, equity release and to provide working capital. Loans are available up to 90% of the site cost.
Flexible first and second charge non-regulated loans available on terms from 3 to 5 years.
We have a commitment to innovation and with the ever changing financial landscape around us we have designed a range of unique Specialist Lending products that solve a range of property finance needs.
By Jonathan Rubins, Director & Chief Commercial Officer at Alternative Bridging Corporation
Residential property valuations have fallen slightly from their recent peak in November 2022. In recent months, however, some property types have fallen more than others. Changes in valuations have also differed by region, with 1/3 of UK homes dropping over 1% in the last 6 months. Overall, UK homes are almost equally split between those increasing in value, those with no substantial change and those losing value.
However, from a long-term perspective, house prices have increased substantially in the last 2 years. The average UK house price has increased by 4.1% between March 2022 and March 2023. Yet, the average house price is around £8000 below the recent peak in November 2022.
In the 12 months from March 2022 to March 2023, the South West of England saw the largest percentage increase in house prices of all English regions of 5.4%. Conversely, London saw the lowest increase at 1.5%. However, since the November 2022 peak, property prices have fallen.
The South of England, Scotland and Northern Ireland have seen the largest proportions of properties declining in value since the November 2022 peak. Houses in Northern England, Wales and the Midlands have seen modest gains in value.
The area which has seen the greatest decline in house prices has been West Central London. Around 68% of homes have decreased in value since November 2022, with an average decease of £13,000. Coastal regions of the South of England have also seen significant decreases in property value. Property investors will want to watch this trend closely, as opportunities for buying at a lower price may be abundant in some areas.
In the period between 2020 and 2022, larger, detached houses were high in demand. However, over the last 12 months buyers have been scaling back their
requirements in terms of property size. Detached homes are now losing value faster than smaller terraced houses and apartments. Around 43% of detached homes have fallen in value by more than 1% in the last 6 months. This presents an opportunity for those moving from a smaller property into a larger home. The possibility of getting a good deal on a larger home is favourable at the moment.
Despite the recent fall in annual inflation rates from 6.7% in September to 4.6% in October, interest rates remain stubbornly high. The Bank of England (BOE) is unlikely to make rate cuts any time soon according to the BOE governor.
The BOE have made clear that the inflation rate target of 2% must be met. As a result, rates will remain high well into 2024, and potentially for longer. Consequently, mortgage rates are likely to remain elevated for longer. This will constrain buyer demand and put downward pressure on house prices into 2024.
However, there is some reason for optimism in the market. Mortgage rates have dropped slightly from their July peak with the average two-year fixed term rate now below 6.5%. Furthermore, the recent decrease in annual inflation rates should give some positive sentiment for the property market.
The commercial property market is in a different situation compared to the residential property market. The value of the UK commercial property market has fallen 13.1% in the 12 months of 2022. This is in sharp contrast to 2021 where commercial property capital values increased by 13.8%. Notably, the industrial property sector fared the worst with a decrease of 21% in 2022.
Much of the decline in commercial capital values can be attributed to high interest rates and economic uncertainty, much like the residential property market. High interest rates and persistent inflation dominates the sentiment drivers for property investors. However, the BOE expects inflation to fall sharply from the middle of 2024. If inflation rates do fall in line with BOE expectations, mortgage rates should drop and ease downward pressure on the commercial sector.
Brokers can take advantage of the economic climate and depressed commercial property values with our Term Loan and Overdraft products. These facilities allow excellent flexibility for your clients and are now available with great additional new offers through our winter promotion.
As part of our winter promotion, we are pleased to be offering up to £2000 (including VAT) valuation and lender legal fee coverage across all our products. This offer is available for all application forms received from 22nd November 2023 to 31st December 2023. The promotion is valid for deals which complete by the 31st January 2024. For further details, please take a look at our T&Cs. Alternatively, why not contact one of our business development managers who will give you a call back within 4 office hours.
Our Alternative Overdraft facility allows you to draw down whenever you need extra funds. It is the perfect facility to use for property auction purchases and site acquisitions or for funding work-in-progress projects.
With our recent rate drop and £2000 valuation and legal lender fee coverage, now is a perfect time to take advantage of this highly flexible overdraft facility.
The Alternative Term Loan is ideal for supporting new and growing businesses within the property industry and business community. Out Term Loan is perfect for securing funding for property purchase, refinance and improvement. This loan is structured to match cash-flow including special arrangements for interest to be accrued when the property income is not yet stabilised. As a result, this loan is ideal for newer businesses and investors looking to take advantage of the current state of the property market.
In addition to our winter promotion of £2000 valuation and legal lender fee coverage, we also have implemented a rate cut for our Term Loans. Our reduced interest rate now starts from 6.75% over BOEBR. We are also very pleased to offer our term loans with no early repayment charge.
With the current state of the wider economy and the property market, now is an opportune time to take advantage of lowered property prices. Our £2000 valuation and legal lender fee coverage and no early repayment charges means the property market is more accessible than before. We make the complex process of procuring property finance simple, with our fast, efficient service. This means our team of finance professionals can respond to your application with great speed and accuracy. Contact us today to see how you can take advantage of these great offers.
Onthemarket, Zoopla and Yopa are our Top 3 recommendations of where you can get instant online UK property valuations.
Reference list
HM Land Registry
Office for National Statistics
Financial Times
Property Week
Centrick
Savills
Zoopla
Rightmove
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