Bridging finance can help property bargain hunters

A financial analyst is predicting that bridging finance is set to play an “ever more important role” in the housing market.

According to Lee Tillcock, editor of Business Moneyfacts, this type of finance could be of particular benefit to buyers seeking to take advantage of the anticipated rise in repossessed homes sold at auction.

Mr Tillcock explains: “Investors buying at auction have often used bridging because they are required to complete within a few weeks of a successful bid when conventional mortgages are sometimes unworkable.”

Adding: “Bridging finance is ideal for any situation where funds are required quickly and for short periods; it can be used to help buyers move fast, often where a distressed vendor needs to realise the value of their property for a quick sale.”

Last year, around 27,100 homes were reclaimed by lenders, a 21% rise on 2006 and the highest level since 1999. Most commentators expect the figures to increase substantially during 2008.

Financial website, This is Money, reports that bridging loans entail high interest rates because they are only required as a short-term solution.

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