Bridging Loans for Landlords

Over the last decade the private rented sector has grown and changed almost unrecognisably. During this period of growth, alternatives to the more traditional approaches for buy to let lending have become more popular.

One such solution for getting quick finance for property purchases and renovations are bridging loans. Landlords across the UK are now using bridging finance to help quickly expand their property portfolio without having to wait for mortgage approvals.

Bridging loans for landlords let you get short-term finance so you can literally “bridge” a funding gap to get a new property, particularly when you need to move fast at an auction.

Landlord bridging loans can help you to:

  • Fund a land purchase for development.
  • Fund a commercial development.
  • Fund property renovations.
  • Fund property purchases at auctions.
  • Fund a buy to let portfolio.

Why use us for landlord bridging finance?

We have access to bridging loan brokers throughout the UK who specialise with landlord finance and property loans.

You will not be able to get short-term bridging finance directly through a high street bank or traditional lender, only via private banks and lenders working with a broker.

By using our specialist advice, we can connect you with an independent broker who can access the whole of the market, attractive rates, and quick finance deals.

How bridging finance can help landlords

Bridging finance is most commonly used by private landlords to finance property purchases at auctions. It’s unlikely you will have the time to get a traditional mortgage before the purchase deadline falls. Bridging finance offers a flexible short-term solution.

Landlords will also use bridging finance to pay for property renovations with developments that are considered uninhabitable. Uninhabitable properties are considered un-mortgageable, therefore bridging finance offers a solution to a gap in funds.

You can also use bridging finance simply to pay for renovations to existing properties in order to increase their re-sale value.

Unlike mortgages, bridging loans can be approved very quickly, with the funds becoming available sometimes as quickly as the next day.

How changes to tax rules have affected landlords

Another reason for the increase in popularity of landlord bridging finance is the changes to the law on tax relief. From April 2017 onwards landlords have only been able to deduct 75% of mortgage payment costs from their tax returns.

That’s set to have a further 25% reduction annually up until April 2020, at which point landlords will have to pay tax on the full rental income.

Some landlords believe this will impact on their ability to financially profit from their buy to let property portfolio and are thinking about selling up.

In order to get the maximum value from their portfolio, many landlords are choosing to renovate and improve their properties to increase the sale values.

Bridging finance for landlords is available as a short-term financing solution for renovations. It lets you raise the finance you need as a loan, and then pay that loan back off once the property has been sold at the best price possible.

How changes to the buy to let industry have affected landlords

Another reason why landlord bridging loans are growing in popularity is changes to the buy to let market. There are now far stricter rules on lending, with the criteria already being tightened up, and probably set to further change too.

This change to the buy to let rules means it’s becoming increasingly harder for landlords to apply successfully for mortgages.

With the speed that bridging finance can be approved, and the difference in how lending criteria is scored, it’s no wonder it’s becoming a more popular funding route.

Is bridging finance right for you?

As with any loan agreement, it’s not something that you should rush into without having fully understood the implications, rates, repayment terms, and suitability.

That’s where our specialist landlord bridging loan brokers can help.

With just a little information from you, they can assess your situation and give you an honest and open appraisal on whether bridging finance will work for you, and if so, what the best loan options and lenders are.

Please remember, bridging finance should only ever be considered as a short-term funding solution. You should think of it as a finance option to progress your property project rather than a long-term financing option.

If you cannot repay the bridging finance and stick to the terms, you run the risk of getting into trouble. Bridging loans have higher interest rates and set-up fees compared to mortgages and so only work best when taken out for a very short period of time.

Compare landlord bridging finance

If you need bridging finance for a property purchase, and need it quick, we recommend that you compare all the rates and deals on the market. Our specialist advisers can help you do that, with access to multiple lenders. 

All you need to do is contact us today, give us a little bit of detail about how much you need to borrow, what you need it for, and what your circumstances are.

Based on that, our team will compare landlord bridging loans across the market and come back to you with some options to choose from.

We will endeavour to find the best rate and deal for you.

Get bridging loan advice now

For specialist advice from a bridging loan broker who understands the buy to let and landlord market, please get in touch with us today.

Bridging finance could be the difference between you missing out on a property purchase, renovating a commercial development, or making a profit from your investment portfolio.

Need specialist advice?

Complete the form to arrange your initial free phone consultation with a bridging loan adviser: