Welcome to Fox Davidson, we are an award-winning bridging loan broker based in the South of the UK. We have offices in Bath, Bristol and London. Working with Fox Davidson will give you access across the UK bridging loan market. We secure fast bridging loans on residential and commercial property and land.
What is a Bridging Loan?
A Bridging Loan is a short term loan secured against property or land. Bridging loan can be secured in a s little as 48 hours and is loaned for a typical term of 12 months. As we will discover, bridging loans can be used for many purposes.
A bridging loan is commonly used when a property is not mortgageable via the high street banks, an auction property is a good example of when we will use this type of short term finance. Bridging loans are used to fund property or land for a short period of time until it is sold hence the term ‘bridge’.
Bridging finance can be used for a number of reasons including
- Auction properties
- Renovation projects
- Chain Breaker – Allowing you to finance a purchase without selling
- Short lease extensions
- Payment of a tax bill
Who Can Take Out a Bridging Loan?
Individuals – Each case is assessed on its own merits so even a First time buyer Bridging loan is possible.
Ltd company – The finance can be secured in the name of a Ltd company.
Pension – A pension such as a SIPP.
Trusts – Trust with the ability to borrow.
What are the typical terms for Bridging Finance?
As a leading professional Bridging Finance broker we can secure finance on exclusive terms from our funding partners.
Finance can be drawn down day 1 and repaid day 2 if necessary. The term of a bridging finance will depend on the situation and needs of our client. If the funds are being used to fund a property development, then we would look at the planned schedule for the build and add in some contingency and the loan would be granted for that period of time. The norm is for a term of 1 to 24 months.
Bridging Loan Amounts and the Loan to Value
Fox Davidson are accredited members of the NACFB. We arrange short term finance solutions for clients wishing to borrow larger loan amounts typically from £300,000 with no upwards limit.
The loan to value of a bridging loan will depend on the situation:
- Residential – Chain break bridging finance – Bridging finance on your current property to allow you to buy a new property until you sale the existing property.
- Commercial – Loan to values on commercial bridging finance are increasing and like residential with additional security we can secure up to 100% loan to value.
Bridging Loan Rates
Historically Bridging loans were offered by a few lenders in a very unregulated environment. These lenders charged around 1.5% to 2% per month with large lender fees payable on acceptance and in some cases fees were payable on the exit of the loan.
Thankfully the market has now become more competitive and challenger banks and new entrants to the market have reduced interest rates and the fees that are charged. Average Bridging loan rates have fallen to around 0.5%pm with lower fees on acceptance and many bridging loan lenders will lend with no exit fees for redeeming the loan.
Rates will depend on the security, the borrower, the term, the loan amount required and the exit. If everything is in your favour, then rates as low as around 0.4% pm are possible.
For the right client and in the right situation we are able to secure chain breaking finance on residential property with no early repayment charges with rates as low as 2% per annum and up to 90% loan to value.
For Buy to let short term funding we can secure up to 80% on rates of around 3% with under £500 in set up costs.
Bridging finance does not have to be expensive and using a fully regulated broker such as Fox Davidson allows clients to get an across the market perspective which more often than not results in a market leading bridging finance terms.