Bridging  

Bridging loan provider opens up £20m funding pot

Bridging loan provider opens up £20m funding pot

A £20m funding initiative has been launched to meet the burgeoning demand for property investment across the UK.

The money will be made available to applicants in the form of bridging loans ranging from £200,000 to £1m by Market Financial Solutions (MFS) as part of its ‘industry-first’ FlipFinance2017 initiative.

It comes after an MFS survey of 1,200 would-be property investors revealed more than a third (35 per cent) believe their goals are out of their financial reach and will remain so during the next five years.

One in four potential property buyers – 7.68 million people – said they have or will consider refinancing their current home up to three times to support a new property investment.

Meanwhile, one in five (21 per cent) said they had relied on consumer loans and expensive mortgages to finance their fledgling property portfolios.

The initiative will run until June 2018 and is targeted at refurbishment and restoration projects.

Rates start at 0.75 per cent up to 75 per cent loan-to-value for first charge buy-to-let or residential investments and 1.25 per cent for second-charge mortgages, with the maximum loan term capped at 12 months.

 First Charge BTL /  Residential InvestmentsSecond Charge BTL / Residential InvestmentsFirst Charge Semi CommercialFirst Charge Commercial
Maximum LTV (up to)75%75%75%75%
Minimum Loan£250,000£250,000£250,000£250,000
Maximum Loan£10m£2m£10m£10m
Minimum Term3 Months3 Months3 Months3 Months
Maximum Term12 Months12 Months12 Months12 Months
Rates from0.75%1.25%0.89%0.89%
Arrangement fee2%2%2%2%
Exit fee (Minimum Term 3 Months)NoneNoneNoneNone

MFS chief executive Paresh Raja said: “There is tremendous value locked in a variety of properties across the nation; without the finance options in place to access them, this part of the property market will remain dormant. 

“To support the refurbishment and restoration projects that are essential to catalyse further movement across the sector, MFS has launched FlipFinance2017 and is very excited to see the results build into fruition.”

Kevin Hever, helper and adviser at Wolverhampton-based Cornerstone Financial, commented: “Anything that ups the housing supply has to be welcomed. It seems a good way to perhaps get houses refurbished that otherwise would be lying derelict and not being used.”

simon.allin@ft.com