LendInvest has said that bridging finance is the “best tool” for property developers and investors in the current uncertain environment.
The online property lender reported record demand for its bridging loans after the first lockdown and heralded the “resilience” of the product throughout the year.
“Its flexibility, for different uses and loan sizes, has also meant it can keep projects moving in the face of lockdowns, giving developers the certainty of acquisition and time to acquire planning, but also lower-cost development exit finance if selling units is impacted by a slowdown in property transactions,” LendInvest said in a blog on its website.
“This is why we believe that, despite the uncertainty and challenges of a second lockdown that could continue across the winter, bridging finance is the best tool for property developers and investors to continue their projects as we move forward.”
LendInvest said that it has seen a lot of use for bridging finance in and around development projects, whether they’ve been affected by lockdowns or not.
This includes developers looking for large bridging loans to purchase commercial properties while they wait for planning permission to turn them into homes and portfolio landlords looking to fund the quick purchase and refurbishment of properties that are not quite ready for rent.
“Bridging is a product type where these alternative valuation approaches have been able to shine because of the nature of the property and the exit strategy,” LendInvest said.
“There is, understandably, a bit more caution when valuing properties that need to return a certain rental yield compared to evaluating a space that needs refurbishment or planning before refinancing.
“For a year of uncertainty, bridging loans have been a lifeline to lots of people in the sector who have needed quick resolutions for their projects, or wanted to take the opportunity provided from government incentives more quickly than they may have been able to otherwise.
“Their resilience and flexibility mean that they should remain the finance of choice for property professionals looking to continue meeting their ambitions throughout this next uncertain period.”