The rise in the number of owner occupiers turning to bridging lenders for finance is reflected in the number of loans being taken out to refurbish properties according to figures just released from the latest West One Loans Broker Sentiment Survey. In February 8% of brokers listed purchase & refurbishment as the most popular use for bridging. This has now risen to 15%.
Duncan Kreeger comments, “There’s a huge housing shortage in Britain. There are many ways the government could solve the problem, from building on the Green Belt and liberalising planning regulations to turning up the heat on the redevelopment of brownfield sites or increasing taxes on second homes. At present none of these things are happening and, as a result, there are too few homes to meet demand. That’s keeping prices artificially high and pushing more and more people and developers to borrow from bridging lenders to buy dilapidated, inhabitable properties – which mainstream lenders won’t offer a mortgage on.
“Despite the government’s best efforts, borrowers have found a way to overcome the obstacles in their path, by borrowing against value rather than purchase price and seeking alternative finance when a conventional mortgage cannot be arranged.”