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Measure for measure

Regulated bridging made simpler

Leanne Smith Sales Director LendInvest

risk of breakdown. Fortunately for the broker, here at LendInvest, the loan application process is similar to non-regulated deals. Also, the opportunities to offer this type of finance are not just limited to homeowner transactions, as we saw recently when working with a broker and their property investor client in Watford.

Demand for regulated bridging finance is increasing. The uptick gained momentum during the pandemic when the government reduced Stamp Duty rates in an effort to get the UK residential property market moving. This led to buyers choosing to bridge to ensure that their purchases were completed before the scheme ended.

Since then, we have witnessed the demand for regulated bridging continue despite changes to broader economic conditions. This is being driven by the housing market which remains fiery. The ongoing lack of sufficient housing for the UK’s growing population is fanning the flames as brokers and buyers race to get purchases over the line. And it is not a problem that will go away any time soon. According to the Office for National Statistics (ONS), the population, which was estimated to be 67.1 million in mid-2020, is projected to rise by 2.1 million to 69.2 million over the decade to mid-2030 which is an increase of 3.2%.

For those who are new to broking or short-term property finance, a bridging loan is regulated if the security (the property) will be occupied by the borrower or an immediate family member. The bridge can be either a first or second charge loan, and typically, the loan term is for a period of 12 months or less – hence ‘short-term’.

From a practical standpoint, regulated bridging loans are often used where there is a slow-moving chain of properties being sold. The bridge helps the entire chain to stay on track and reduces the The broker approached us because his client wanted to release some of the capital in his home to complete on an investment opportunity purchased at auction. The client had already planned to leave his current residence and remortgage it onto a buy-to-let mortgage in six months’ time. We backed the deal worth £660,000 at 66% LTV.

Because the client was making an auction purchase, the deal needed to complete within 28 days, so speed was of the essence. Fortunately, our intermediary portal now accepts regulated bridging applications and so the broker was able to submit the deal this way.

In fact, using our portal has been a gamechanger for brokers as it offers the fastest route to processing LendInvest applications.

The portal’s design has inbuilt process efficiencies including online document management and e-signatures. For example, brokers can get instant quotes as well as an European Standardised Information Sheet (ESIS) for clients in minutes – that’s the document which provides all the important information borrowers need to help them decide if the loan is suitable and enables them to make a comparison with other lenders.

The portal also allows brokers to manage all their deals with LendInvest in one place, as well as access expert support. The live dashboard shows the status of every case, and the application process saves information for repeat customers, meaning the more times brokers use it, the quicker and simpler it becomes for them to

continue using it. Additionally, the portal provides brokers with a review of potential earnings from deals.

We are delighted that our broker partners have been keen to embrace this technology across our bridging range, with around 80% of applications submitted through the portal since the start of the year and more than 1,000 brokers activated to use it. This take-up demonstrates the value good technology has to offer and shows that with the right tools, brokers feel confident that they can deliver quickly for their clients when the need arises. Looking ahead, we anticipate that regulated bridging products will remain a handy option for brokers as landlords continue to invest and homebuyers go on downsizing and upgrading. Here at LendInvest, we stand ready to help and will continue to make improvements to both our products and the portal.

Issued by LendInvest Loans Limited, which is authorised and regulated by the Financial Conduct Authority (ref: 737073) in the UK to enter into (as lender) and administer regulated mortgage contracts.

For intermediaries only

Log in to regulated bridging

Online calculators, online enquiries and online applications: submit and manage your regulated bridging deals in one place. Rates from 0.48%. Property finance made simple.