Realistically, a mortgage product that is applied for now is unlikely to complete before the stamp duty holiday period ends on 31 March and some lenders have made public statements to manage expectations around this.
However, with the average completion time of a bridging loan usually being much quicker than a standard mortgage, in the right circumstances, bridging can assist clients looking to beat the deadline.
This could be particularly useful where the conveyancing process has already started but a mortgage application has fallen through.
Aside from this standout opportunity, bridging finance can be used to provide bespoke funding solutions to tackle complex requirements and, as such, is always a valuable tool for brokers.
Business cash flow and tax bills
The succession of lockdowns has been crippling for businesses and when government lifelines in the form of Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) are removed, many businesses could benefit from short-term flexible finance.
A bridging facility could be a fast way to inject further cash into the business, enabling a speedy recovery as we begin to emerge from this difficult period.
Similarly, the finance of many individuals, particularly the self-employed, have come under immense strain over the last year and while some tax is able to be deferred, bridging finance may provide an emergency solution to settle due balances.
This is very much an emergency solution but in the right circumstances and where there is a robust exit in place, bridging could be a valuable tool for many.
Refurbishments are one of the most popular uses of bridging finance and present an ongoing opportunity for investors.
Bridging can offer a short-term funding solution for investors to purchase run down and non-habitable properties that would otherwise be declined by standard mortgage lenders.
It provides the flexibility to purchase, fully renovate and refurbish these assets before selling on for profit or adding to an investment portfolio.
Converting commercial spaces
The trend for people to work from home more frequently is likely to continue and consequently many businesses could reduce their requirements for office space this year.
This may put some downward pressure on commercial property prices and, combined with permitted development rights, will provide investment opportunities for developers to purchase vacant commercial property and convert to residential use.
Bridging finance will be at the forefront of lending options to fund these types of transactions.
FOR INTERMEDIARIES ONLY AND NOT INTENDED FOR THE GENERAL PUBLIC.