What property types can be used as security for a bridging loans?

Bridging loans can be secured against different types of properties being residential, semi-commercial, commercial or land, and enabling options such as:

Properties to buy

  • A new residential property, commercial property, investment or trading property
  • Buy-to-let purchases
  • Quick completion of a property purchase to benefit from a discounted price
  • Auction purchases with pre-auction bidding facilities agreed

Properties to build and renovate

  • Housing developments
  • Barn conversions
  • Refurbishment projects to sell on for profit
  • Building your own home

Properties where funds need to be raised quickly

  • Un-mortgageable properties
  • Buying before selling
  • A short term solution for a cash flow problem

How can bridging finance be used on un-mortgageable properties?

Bridging loans can be used by investors looking to purchase properties that cannot have a normal/standard mortgage secured on them until the necessary corrective work is carried out, including:

  • Properties with no bathroom
  • Properties with no kitchen
  • Non standard builds

The refurbishment of an un-mortgageable property will usually increase its value following the completion of the work. Bridging loans provide investors with the opportunity to buy these often derelict properties and start their renovation project prior to letting and securing long-term finance or selling for a profit.

Bridging loan providers will take into consideration an investor’s current property portfolio as well as their potential purchase, making sure that they have the appropriate land or property to use as security. Investors can therefore use the equity on a current property to meet the value of the bridging loan they require to purchase to renovate another property.

Once renovation work has been carried out and the property has been made habitable, the owners can then apply for a normal/standard mortgage or sell for a profit.

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