In the last few months, we have seen lots of opportunity in the current market. High Interest rates are making a lot of people panic. Homebuyers seem to have all but stopped buying and homeowners are looking to sell.
What are we seeing?
We are seeing substantial discounts on excellent investment properties. We’re seeing opportunities on other kinds of lending such as angel investors, Bridging Loans and Development Loans. Savvy investors are snapping up some substantially discounted properties to develop into HMOs or capitalise on other strategies.
What does this mean?
Rather than panic, we’re seeing it as an opportunity to get a little more creative with our purchasing options. For example, Bridging Finance. Bridging finance is a type of short-term loan. Lenders offer bridging loans from anything between £5,000 to £25m, so the amount you can borrow will depend on your current financial circumstances and your credit history. Most lenders will allow you to borrow up to 75% of the value of your property. Typically, Bridging Loans have been considered to be very expensive in comparison to a standard BTL mortgage. However, given the hike in interest rates bridging lending is now relatively comparable to mortgage lending. It’s also MUCH more flexible.
Will it last forever?
We don’t think so. We think that this window of opportunity will be open for around 9-12 months. The Times are reporting that “cheaper mortgages will be available in weeks”. This is likely to mean a kick start in the residential market again. There are so many advantages of developing now before the mortgage rates start to drop, the fear of high rates cools and the discounts slow.
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