Bridging Loans for Property Development: Accelerate Your Property Empire

  • Fast Funding: Get the cash you need in just 5 days – 3 weeks.
  • High Loan to Value: Borrow up to 80% of your property’s value.
  • Competitive Rates: Start from just 0.43% per month.
  • Flexible Options: 1st, 2nd, or 3rd charge considered.
  • Tailored Terms: Choose a term from 1 to 36 months.

What are property development bridging loans?

Property development bridging loans are a type of short-term financing that property developers, investors, and landlords can use to fund various stages of a real estate project.

These loans are designed to provide quick access to capital for tasks like acquiring land, covering construction costs, or completing renovations before a property is sold or refinanced.

Unlike traditional mortgages, property development finance consider the expected value of the property once the development work is finished. This allows borrowers to undertake more ambitious, high-profit projects that may be out of reach with standard financing options.

Bridging lenders will assess the viability of the development plan and the borrower’s experience to determine the maximum loan amount based on the property’s projected Gross Development Value (GDV).

These commercial bridging loans are often used when there is a gap in funding that needs to be filled quickly, such as purchasing a new property before an existing one has sold.

They can also be helpful for financing the purchase of run-down commercial spaces or brownfield sites that are difficult to get traditional mortgages for. The short-term nature and flexible use of property development bridging loans make them a valuable tool for real estate investors and developers looking to move swiftly on opportunities.

Key advantages of property development bridging loans

  • Quick access to funds to purchase property or begin work
  • Borrow against a property’s existing or projected value
  • Overcome timing issues when other finance isn’t readily available
  • Repay once long-term lending is secured after completing the development

Whether funding a single residential flip or major commercial development, bridging loans offer the short-term financial freedom developers need to capitalise on time-sensitive prospects.

Seize your next property opportunity

Don’t let prime development deals slip through your fingers. Our bridging finance experts will guide you towards the perfect short-term lending solution to move swiftly on properties and projects. Discuss your needs with a bridging loan specialist today.

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How does a property bridging loan work?

A bridging loan is a short-term loan that helps property developers in the UK quickly get the money they need to start or continue their projects. It’s like a financial bridge that developers use to buy property or land until they can get more long-term financing. Here’s how it works:

  • APPLYING FOR THE LOAN: Developers talk to a broker who knows a lot about these loans. They fill out an application with details about the project, their money situation, and the property they’re developing. The broker helps them find the best loan option.
  • GETTING THE LOAN APPROVED: Lenders look at the project plans, how much money is needed, the value of the property, and the developer’s experience. If everything checks out, they approve the loan and set the terms, like interest rates and how long the loan lasts (usually 12-18 months).
  • USING THE LOAN: With the loan, developers can buy land or buildings. This helps them keep working on their projects without waiting for long-term loans or other money to come in.
  • REPAY THE LOAN: Once the development has added value to the property, developers can refinance with a longer-term loan. This lets them repay the bridging loan, which usually has a higher interest rate, and move on to cheaper, longer-term financing.

So, a bridging loan is a helpful tool for developers to keep their projects moving and not get stuck waiting for funding.

What does a development bridging loan cost?

When you’re working on property development in the UK, it’s easy for costs to go up unexpectedly. This is where a bridging loan broker can really help out. They make sure developers know all the costs involved.

Key factors affecting cost:

  • LOAN AMOUNT: Development bridging loans are usually bigger because projects are bigger. More money borrowed means more interest to pay. But, the money you make from the project could balance this out.
  • INTEREST RATES: These loans start with interest rates around 5% per month, but they’re usually between 6.5-9%. The rate depends on how risky and complex your project is. Lenders have different ways to pay back this interest that can fit how you manage your money.
  • ADDITIONAL FEES: Don’t forget about extra costs like valuations, legal fees, and sometimes broker fees. Different lenders might charge different fees.

For big projects, it’s super important to think about all these costs. Delays and going over budget are common, so you need to be ready. Having a broker by your side can mean better loan terms and making sure you understand all the costs before starting. Read our bridging loans costing guide for more information.

Bridging loans are great for short-term money needs, like starting a new housing project, fixing up commercial properties, or buying several properties. Working with a broker means you know exactly what you’re paying from the start.

Estimate your bridging loan costs with our bridging loan calculator

Want to get a head start on your project budget?

Use our easy-to-use Bridging Loan Calculator to get an initial estimate of your costs.

Simply input your loan amount, desired term, and other key details, and our calculator will provide you with a breakdown of:

  • Facility Fee.
  • Monthly Interest (rate and cost in sterling).
  • Valuation Fees.
  • Lender Fees.
  • Broker Fees.
  • Admin Fees.

Get a clear picture of your potential costs and make informed decisions about your property development project.

Button: Calculate Your Bridging Loan Now!

Need a bridging loan for your next project?

Contact us today. Our team of Expert Mortgage Brokers is here to guide you to the right bridging loan for your property development needs.

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What types of properties can a bridging loan be used for?

Bridging loans are a handy tool for UK property developers, fitting for different types of properties and projects. Here’s how you can use them:

  • RESIDENTIAL PROPERTIES: Great for homes, rental properties, multiple-occupation houses, or apartment buildings. They help you quickly buy and fix up these places before getting a long-term loan.
  • COMMERCIAL PROPERTIES: Perfect for buying office spaces, shops, industrial sites, or warehouses fast, so you can start working on them while looking for long-term financing.
  • MIXED-USE PROPERTIES: If a property has both shops and apartments, bridging loans can fund the purchase and fixing up the whole place.
  • AUCTION PROPERTIES: These loans are super quick, making them ideal for buying properties at auction or ones that need a lot of work right away.
  • LAND: Whether it’s a bare plot or one ready for building, a bridging loan can help you start construction or renovation, setting the stage for a longer-term development loan.

No matter if you’re buying, refinancing, or starting a big project, bridging loans give you the flexibility to move fast and keep your development on track.

How much you can borrow with bridging finance for property development?

Bridging finance helps property developers in the UK get big loans for their projects. You can usually borrow between £100,000 and £25 million. Loans over £1 million often have better interest rates.

What affects how much you can borrow?

  • PROPERTY VALUE: The more your property is worth, the more you can borrow.
  • EXISTING EQUITY: If you already have money invested in the property, you can borrow more.
  • LOAN-TO-VALUE (LTV) RATIO: Lenders might let you borrow up to 80% of the property’s value. If you have extra security, maybe even more.
  • REPAYMENT STRATEGY: You need a good plan for paying back the loan, like selling the project or refinancing.

Bridging loan lenders will also look at your credit and how much experience you have with development. For big projects, you’ll need a solid business plan and to show that the project is likely to succeed.

Expert tips:

Working with a reputable bridging loan broker can get you the best deal. They’ll help figure out exactly how much you can borrow and find the best rates and terms for you.

Unlock your property development potential today

Are you ready to seize lucrative property development opportunities without the constraints of traditional financing? By using a bridging loan, you can gain the financial freedom to acquire new sites, kickstart renovations on existing properties, or secure a commercial property for ambitious development projects.

Our experts will guide you through the process, ensuring you secure the ideal loan amount and terms to maximise your loan-to-value potential.

With a bridging loan, you can act swiftly, repaying the short-term finance once your development nears completion and long-term lending is arranged. Don’t let prime prospects slip away – take out a bridging loan and keep your property development vision moving forward without delays.

Discuss your bridging loan options, request a callback!