As demand for desirable properties continues to outstrip supply in all regions of the UK, mortgage processing times have been increasing for several months. According to the latest figures from Property Mark, a leading UK estate agency body, the average property transaction completion time has now reached between 13 and 16 weeks.
Commenting on the growing bottleneck, the company’s CEO, Nathan Emerson, said that current mortgage processing times were exponentially longer than the typical 6 to 8-week norm. He also attributed much of the backlog to the rush that preceded the partial withdrawal of the stamp duty holiday, which saw lenders and brokers inundated with hurried mortgage applications.
Reports suggest that many prospective buyers who wanted to take advantage of the temporary stamp duty suspension were unable to do so due to slow mortgage processing times. Even those who believed they were getting their applications underway at an early juncture found there was insufficient time to complete the process before the offer was withdrawn.
Bridging loans proves popular to prevent delays
The more difficult it becomes to arrange a mortgage quickly and efficiently on the High Street, the more attention the UK’s specialist lending sector is attracting. Bridging finance in particular is proving a popular option among movers, looking to ‘bridge’ the gap between the purchase of their new property and the sale of their current home.
With bridging finance, it is possible to reduce the lengthy processing time of a typical mortgage to less than two weeks. In some instances, the funds provided by way of a bridging loan can be accessed within a matter of days. For time-critical property purchases and investments, bridging loans can be uniquely flexible and accessible.
Put into context, a homeowner looking to relocate may find their dream home at an unbeatable price in the perfect location. However, their current home has only recently been put on the market, and a buyer is yet to be found.
A bridging loan secured against their current home could provide them with the funds they need to pay for their new home outright. After which, the bridging loan is repaid several weeks or months later, just as soon as their previous property is sold.
Bridging finance attaches a monthly rate of interest, often lower than 0.5%, along with minimal borrowing costs where the balance is repaid promptly.
Assessing suitability for bridging finance
Prior to applying for a bridging loan for any purpose, it is advisable to speak to an independent broker to discuss all the alternative options available. Bridging finance is offered exclusively with short-term applications in mind and should never be seen as a viable alternative to a conventional long-term mortgage.
As a way to bypass mortgage processing times and ensure your dream home does not slip through your fingers, bridging finance can be an unbeatable facility.
For more information on bridging loans or to discuss bridging finance qualification criteria in more detail, contact a member of the team at UK Property Finance today.