The growing demand for regulated bridging

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By Victoria Barnard, BDM

January was a bumper month for our regulated bridging product, as we saw a record number of applications coming through our bridging portal.

From speaking to brokers, we can see this is partly about ease of use – online applications and AVMs are making the process faster and cheaper, which is a huge benefit to them and their clients when regulated bridging is often needed at short notice. 

Outside of that though, we are seeing varying use cases for it as homeowners try to navigate what is a more complex environment this year, with inflation pressures and a lack of confidence from homebuyers affecting their next home.

Here are the ways we will see regulated bridging be needed more and more this year. 

Chain breaks

A big spike in the number of deals we have seen has come from chain breaks. 

At the end of last year, of course, interest rates rose sharply, and if completions didn’t happen quick enough, mortgage offers were being withdrawn and reissued, and in a lot of cases this made people pull out of their new purchases, threatening whole chains. 

This is an unfortunate – but understandable – response to the climate we found ourselves in, and homebuyers have responded quickly with regulated bridging to make up the shortfall. 

In circumstances where house buying activity has slowed as well, buyers are using regulated bridging to get into their new home while the market gets ready to keep up with them. 

An alternative to higher long-term rates

As an evolution of this, we’re also seeing homebuyers turn to regulated bridging as a short-term mortgage in the face of higher long-term rates. 

While last year made a mockery of the idea of being able to predict what’s going to happen in the mortgage market, we are reasonably confident that rates will come down as the year progresses, which means a shorter-term mortgage becomes more attractive so they can jump out on a rate more suited to them. 

Obviously this doesn’t discount the need for affordability testing and a clear exit strategy – regardless of whether rates come down or not – but it is a stop-gap that we’re seeing more brokers and their borrowers be willing to explore. 

Flexible uses

One of the great things about bridging finance is the variety of deals that come across my desk, which is a great testimony to the flexibility that we can offer homeowners. 

In the past couple of months, we’ve showcased different deals, including: 

• A homeowner looking to capital raise and repay an existing loan before using the rest to help them buy their new home
• A self-builder impacted by increased material costs needed more money to finish the project, so raised money against the value of their current home to help them build their dream one
• A homeowner wanted to release funds to invest in different assets, notably a vintage car

As I’ve heard from my brokers, and as we tell them, the appetite to buy homes won’t go away in a challenging environment, people just need the right solution, which regulated bridging looks continually able to provide.

See our full bridging range, get instant quotes and apply online for terms in minutes.

LendInvest plc is a public limited company registered in England and Wales (No. 8146929). Registered Office: 8 Mortimer Street, London, W1T 3JJ.

For borrowers, borrowing through LendInvest involves entering into a mortgage contract secured against property. Your property may be repossessed if you do not keep up repayments on your mortgage.

LendInvest Loans Limited is a company registered in England & Wales with Company No. 09971600.

LendInvest Loans Limited is authorised and regulated by the Financial Conduct Authority (FRN:737073). LendInvest Loans Limited is a wholly owned subsidiary of LendInvest plc.

Borrowing through LendInvest involves entering into a mortgage contract secured against property. Your property may be repossessed if you do not repay your mortgage in full.

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