If you are considering using a bridging loan to speed up your property purchase or fund a renovation, your instinct might be to go to your bank and ask them about their bridging finance products. What should you do when you discover that they don’t offer bridging finance at all? We’re here at Clifton Private Finance to help. Let’s break down some myths about banks and bridging finance.
Key Takeaways
- Bridging finance is a specialist product not offered by UK high-street banks.
- Specialist lenders offer a range of bridging products to suit your individual need.
- Bridging loans are regulated when used to buy a home to live in, and can be non-regulated for investment purposes.
- Working with Clifton Private Finance as your bridging finance broker ensures a smooth application and ongoing support.
A Quick Overview of Bridging Finance
Bridging finance refers to a short-term funding solution that’s typically secured on property to give you immediate access to the capital you need to:
- Buy a property without waiting for lengthy mortgage approval.
- Buy a property that’s ‘unmortgageable’ due to a need for significant renovation.
- Secure your new home before your current house is sold (breaking the property chain).
- Move rapidly to avoid being gazumped.
- Fund renovations and redevelopment.
- Take advantage of opportunities with a short window.
- Pay for care costs or other needs while waiting for a property sale.
The High-Street Bank Approach to Bridging Finance
It’s easy to assume that just because you’re borrowing money, it’s something a bank would provide - after all, that’s what they do. However, bridging finance is not something that most high-street banks offer. Does that mean there’s something wrong or to worry about with bridging finance? Absolutely not.
As an analogy, consider a shop that sells clothes. You wouldn’t go in there looking for a new set of curtains. Yet some people would argue that both are made of fabric, involve a lot of sewing - doesn’t that make them the same thing? Of course not.
For the clothes shop, stocking curtains means dedicating shelf space to a range of products they might rarely sell. It means training their staff on the fine nuances of curtain usage. It means finding curtain suppliers. And, if it gets few customers wanting curtains, all that extra effort is wasted.
That doesn’t mean there’s anything wrong with curtains, nor that the clothes shop owner dislikes curtains.
The same is true with banks and bridging finance. The detailed knowledge, smaller pool of customers, and specialist nature of bridging finance means that the cost and effort for the high-street banks to offer bridging finance as a product is simply not profitable. They’re happy sticking to more mainstream funding, like mortgages and savings accounts, which they can do well.
That’s why, if you want a bridging loan, you need to look to a more specialist market of lenders, ones who might not have a presence on the high street.
The Role of Brokers in Bridging Finance
Bridging finance is complicated and specialised. Plus, despite appearances to the contrary, there are a great many lenders who offer bridging finance products. Knowing which lender is right for you, comparing the fine details of one bridging loan product to another, and getting all the paperwork in order to make your application smooth and successful - that takes real expertise.
It is absolutely possible to get bridging finance without seeking the help of a professional broker. You could spend the time needed researching the different lenders, learning about the minor differences between options, and working on all the paperwork required but it could take months - not great in a market where speed matters most. It’s also unlikely to get you the best deal, nor will it give you access to those additional premium lenders who prefer to only work through brokers...
The truth is that in the world of bridging finance, a trusted broker is vital. At Clifton Private Finance, we ensure that:
- Your bridging finance is absolutely the right product for you.
- Make a fully informed decision.
- You can choose from the full UK marketplace of bridging providers.
- The lender you use is FCA-approved.
- You have the help you need collating the paperwork.
- Application is watertight.
- Exit strategy is realistic and viable.
- You have a specialist checking every detail of the loan before you sign.
Choosing Clifton Private Finance will give you the best chance to secure a bridging finance deal that is the best fit, tailored to your specific needs. We are here for you, working tirelessly to make sure your bridging finance is exactly what you need it to be.
Understanding Bridging Finance Lenders
Bridging finance lenders aren’t typically household names, but that doesn’t mean they’re small or untrustworthy. The UK has a well-established network of specialist lenders dedicated to bridging and short-term finance, many of whom are backed by major institutions or banks at a higher level.
These lenders understand the fast-paced nature of property deals and with direct person-to-person human interaction, offer a level of flexibility that high-street banks simply don’t.
When you work through Clifton Private Finance to get bridging finance from one of these well-established lenders, you know that your exact personal circumstances are being considered in detail. Your funding needs are properly understood and decisions are made rapidly without the need for long, complicated, and inflexible underwriting.
Rather than the rigid ‘computer says “no”’ attitude of a high-street bank, specialist bridging finance lenders treat you as an individual - just as it should be.
Regulated vs. Non-Regulated Bridging Finance
In the UK, the FCA oversees personal finance borrowing, working on your behalf to make sure you are protected. Regulated loans must follow rules that ensure fairness, transparency, and responsible lending.
In the world of bridging finance, both regulated and non-regulated loans exist. When using bridging to buy a property you plan to live in, the finance is strictly regulated. Non-regulated bridging loans are available for business use and for individuals looking to make investments, such as when flipping properties for profit.
Regulated loans come with protections, such as a cooling-off period, a duty of care regarding advice, and a complaints process should something go wrong. However, they also have stricter application guidelines and borrowing limits.
Non-regulated loans enjoy extra flexibility with a little more risk, better for rapidly seizing investment opportunities.
Obtaining Bridging Finance with Clifton Private Finance
Speak to an expert at Clifton today. We will discuss your project with you in detail to get a comprehensive overview before helping you find a bridging finance lender to suit your specific requirements. Don’t delay - call now for fast and flexible property finance to secure your dream property.
