Act quickly using bridging finance to take advantage of opportunities

Act quickly using bridging finance now!  The latest industry reports are all showing that the UK property market is experiencing healthy levels of activity, with HPI data indicating significant price inflation. For example, according to the Halifax House Price Index for August, annual house price growth has risen to 4.3%, marking the strongest rate since November 2022. The report added that the average property is now just £1,000 below the record high set in June 2022 of £293,507.

Golden Opportunity for Investors

This upward trajectory in property prices presents a golden opportunity for investors. Savills has predicted that property prices will rise by 21.6% over the next five years. This forecast is underpinned by a combination of factors, including an improving outlook for economic growth in 2024 and the decisive General Election result.

Savills also highlights the cautious – but growing – optimism in the market, noting that while price rises this year may be contained to 2.5%, the longer-term outlook remains positive. The forward indicators from RICS have become more favourable, with new buyer enquiries increasing and surveyors’ price expectations following suit. However, the market is not without its challenges. The continued imbalance between sellers’ expectations and buyers’ ability to pay, along with volatile swap rates and external economic pressures, means that the market remains exposed to potential headwinds.

Despite these challenges, demand for property remains robust, driven by investors who have access to cash or financing and are eager to expand their portfolios. The market is still rich with opportunities for those who can move quickly. Investors, particularly landlords, are looking to maintain or expand their holdings, with little sign of retrenchment. The urgency to act is further emphasised by the fact that while the supply of new properties coming to market has increased, demand is still outpacing it.

The need for speed

Demand is only likely to increase further if we are indeed at the start of a positive cycle for asset prices. In such an environment, quick decision-making can be the difference between securing a lucrative deal or missing out.

Of course, bridging lenders are known for their ability to act swiftly, often completing deals in a matter of days, which is crucial in a market where property prices are on the rise.

Bridging loans offer flexibility and speed, enabling investors to secure assets before prices climb further. As long as the lender is confident in the borrower’s exit strategy – whether through the sale of the property, refinancing, or other means – they can provide the necessary funds quickly.

This speed and flexibility are particularly valuable in scenarios such as property auctions, which look set to remain popular among investors, first-time buyers, and owner-occupiers. Auctions often present opportunities to acquire properties at competitive prices, especially those that may need refurbishment. However, the rapid turnaround required – typically within 28 days of the auction’s conclusion – means that traditional financing options, such as buy-to-let mortgages are often too slow.

This is where bridging loans come into play. By securing a bridging loan, investors can not only purchase the auction property in the short window of opportunity but also finance any necessary refurbishments. Once the property is improved, the investor has the option to either sell it for a profit or remortgage with a buy-to-let term loan or residential mortgage, depending on their strategy.

Act quickly and decisively

The benefits of bridging loans are not limited to investors alone. Homebuyers can also take advantage of regulated bridging loans in a rising house price environment. For example, when a property chain breaks down, homebuyers may find themselves at risk of losing their desired property. A regulated bridging loan can effectively turn the buyer into a cash buyer, allowing them to proceed with the purchase despite the disruption. The fast turnaround of the bridging application ensures that the home purchase stays on track, which is particularly important in a market where property prices are steadily increasing.

As we head towards the end of 2024, the signs are that property market conditions in the short to medium term will favour those who can act quickly and decisively. With property prices on the rise and demand remaining strong, the window of opportunity for investors is upon us. Bridging loans offer a quick and flexible financing solution that can help investors and homebuyers alike secure properties before prices climb further. As the market continues its upward trajectory, those who delay may find themselves priced out of prime opportunities.

Therefore, the time to act is now – before the best deals are gone.