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resi transactions surge in bid to beat rate rises

According to data published by HM Revenue & Customs, the number of UK residential property transactions increased by nearly a third in July as buyers raced to secure low rates before the Bank of England’s Monetary Policy Committee met on 4th August. With 110,970 residential purchases processed in July on a non-seasonally adjusted basis, this marked a 32.9% increase year on year, and a 7.2% increase compared to the previous month.

This flurry of activity was no doubt good news for sellers keen to take advantage of a market that keeps defying expectations. Despite predictions (and some signs) of a slowdown, and Halifax’s House Price Index observing that the average price of a home fell by 0.1% in July, the market has once again rallied – albeit not as dramatically as in previous months – with Halifax’s August Index reporting a 0.4% rise. This now puts the average UK property at a record £294,260.

 

a quicker solution

With three more Monetary Policy Committee meetings scheduled between September and December – and with speculation swirling about a further rate rise later this month – there is the potential that we can continue to see further flurries of activity in the housing market between now and the end of the year.

For those needing a quick solution, we have a proven track record of being able to move at pace. This was the case for a client who urgently required £2.73m to purchase a five-bedroom investment property with an open market value of £3.9m. The Notice to Complete had been served and a completion date set. However, as a foreign national whose finances were tied up in shares, obtaining a BTL mortgage would have been a slow process. If the client could not secure the total balance before the Notice to Complete deadline, the seller would have had the right to terminate the contract, meaning the client could have lost their deposit of £195,000.

We knew that the property had huge potential as a rental thanks to its prime location and it being in a very good condition, meaning tenants could move in without delay. These factors enabled us to start the process without any delays. Our underwriters and case managers worked closely with the valuer and solicitor to issue a first charge bridging loan of £2,370,000 at 70% of the property’s loan-to-value of the open market value. Interest was applied at 0.85% over a 12-month term.

Our ability to quickly approve a bridging loan for the client ensured that they could complete the purchase and save their deposit. As well as adding almost £4m to their portfolio, they’ll also receive excellent rental income. The 12-month term will give them time to refinance on to a BTL mortgage and exit our loan. As with all our bridging loans, if this happens in under the 12 months, then our client will not be charged any exit fees or early repayment charges.

 

how we can help

Renowned for our speed and our service, our ability to take a common sense approach to cases – and move extremely quickly – can help to put you in a very strong position and allow you to compete with cash buyers. Key features of our bridging loans include:

  • Rates from 0.69%
  • 1st & 2nd charge loans
  • Loans from £50,000 – £10,000,000
  • Up to 70% LTV
  • Terms from 1 – 24 months
  • Residential, commercial & semi-commercial property
  • Adverse credit, CCJs and arrears considered
  • No up-front fees, no exit fees, no ERCs
  • No credit scoring

If you have a transaction that you’d like to discuss with us, our team can be contacted online, via email, or on 0203 051 2331.

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