Economic volatility is an opportunity to pursue other options – West One Loans

Of course, the truth is it is still far too early to give any meaningful analysis of what the result of the UK leaving the European Union will be and given the High Court’s ruling over the triggering of Article 50, a lack of clarity remains.

However, with that said, economic volatility often brings opportunities, and it’s crucial to recognise that in this climate, a ‘one size fits all’ model doesn’t work. There is a need for financing options to be tailored, bespoke and which cater for the individual borrower’s needs. There are few people or small businesses in this world who can afford to buy a property outright, and financing for property – whether commercial or residential – can come in a variety of forms, creating a space for specialist finance. Unfortunately, many are often overlooked as being a ‘last resort’ despite the benefits and flexibility they hold while in such a turbulent period.

Bridging loans are a prime example of this, being a unique type of property financing that helps people to bridge a financial gap. These loans are ideal for investors in the process of buying and selling of properties, particularly at auctions, buy to let, or refurbishment work, as they’re usually short term and can be agreed on in relatively quick notice period. This can be anywhere between just three days and three months, allowing property transactions to complete which may otherwise fall by the wayside.

Bridging loans can be first charge or second charge and, as they are given on the value of the property and the borrower’s ‘exit strategy’ to paying the loan back rather than their ability to repay monthly payments, they can be tailored directly for that purchase. Bespoke residential, commercial, and buy-to-let bridging loans are then available within this category, which is particularly beneficial given the competitive and fast-paced nature of securing the property before other investors can.

Recent data by HMRC found buy-to-let purchases made up a quarter of all property sales during the summer, suggesting economic instability is yet to put the brakes on the commercial market, as more investors seek to make returns during a period of historically low interest rates. Investors should seek to secure a specialist loan such as bridging, which allows for minimal background and set up alongside a quick turnaround time, allowing them to maximise on this opportunity.

It may be too early to feel the true effects of Brexit, but flexibility will be vital for ensuring you help your client’s navigate this particularly turbulent climate.