Residential property bridging finance is a popular and frequently utilised method to quickly raise funds to refinance or purchase a residential property. It is estimated that the UK bridging finance sector is in excess of £4bn a year. This increased liquidity and appetite for risk has created many opportunities for borrowers, some of which may have not been fundable in the past.

In the past bridging finance was used mainly for home movers who had bought a new home but not sold their own. These days it is a product that’s used widely for a diverse range of purposes. 

Typical terms for residential property bridging finance can range from 1 month to 36 months with interest rates from 0.40% to 1.50% per month – the cost of funds is determined by the risk of the transaction such as borrower experience, credit history, gearing, location and exit.  The lenders products are made up of an arrangement fee, a monthly interest rate and an exit fee. The borrower will also have to cover the cost of the valuation of the property and the legal work to complete the conveyancing process.

The monthly cost of interest can be rolled in to the loan or serviced monthly by the borrower, or a combination of both.  We see borrowers raising finance in their individual names, via a company or through their pension.  The options are flexible and our recent completed deals include:

  • Fund raise to enable the completion of a residential property development in the Highlands.

  • Use of an Edinburgh based residential property as security for the funding.

  • Speed was critical, delivered in sub 4 weeks.

  • The borrower had his own funds but preferred to borrower to maintain his own liquidity.

  • 75% of the market value of the property released.

  • The pricing achieved was 0.94% per month with a 2% arrangement fee and no exit fee.

  • The agreed exit was through the sale of the properties being constructed, some of which had been pre-sold.

Contact Jamie Davidson for the latest pricing, products and terms on offer by completing this brief enquiry form.