Amidst the short term turmoil and uncertainty in both the UK financial markets and in the UK political arena following the Brexit referendum, we felt it would be a great opportunity to explain to borrowers and brokers why we’re committed to bridge lending.
Here’s some of the key reasons:
1. Speed – Bridging deals generally happen quickly, so money can be deployed fast. When interest rates are so low, you don’t want that money sitting in a bank earning nothing (especially if the BoE wants to drop interest rates further).
2. Volume – because bridging deals can be deployed quickly, that means greater volumes can be deployed, faster. Again, that means less money sat on account earning nothing.
3. Security – property bridge loans are generally secured against first or second charges on the land registry plus further security if required. This is a really solid position, albeit perfectly normal for a lender.
4. Pricing – We can achieve good rates of return on our money, even taking the high cost of deal acquisition into account.
5. Unbeatable Risk Adjusted Returns – relative to other asset classes, bridging still offers excellent returns for the level of risk taken, provided you lend at the right LTV.
6. Flexible loan terms – Bridging loans are generally from 3 to 12 months. That means it is really flexible within our family offices’ capital allocation strategies.
In the coming weeks we’ll explain in a bit more detail why now is a particularly good time to be active in the bridging market.
However, we would like to reassure brokers and borrowers that we remain very much active and open for business. Our recent loan to Magna Group [link to the post] shows that we are committed to lending to hungry, entrepreneurial businesses.
We remind borrowers and brokers who are feeling fearful about the property market that Britain is a small and crowded island. There are not enough homes for people. And as long as that remains the case (which is highly likely), the fundamentals for lending remain strong.
We look forward to receiving your next enquiry.
NOTES TO EDITORS
Avamore Capital is a special situations lender that provides loans to property traders, developers and investors, and other property entrepreneurs. Loan sizes are between £0.5m and £5m with larger loans possible in conjunction with its partners. Avamore offers a flexible, quick feedback and fast drawdown, subject to due diligence.
For further information, please visit: www.avamorecapital.com