Bridging loans “too risky” as house prices fall

The unstable housing market makes this a “risky” time for both borrowers and lenders to be considering bridging loans that cover a property’s entire value.

According to Savills Private Finance director Melanie Bien, those who buy a house with the intention of selling it on could be unable to do so very quickly in the current climate, leaving them with an expensive premium to pay.

Falling house prices also means that lenders are unlikely to be willing to grant such loans, she remarked.

Ms Bien, said: “Lenders are going to be more cautious than ever and borrowers should be as well, to make sure they understand what price they are paying and what the property’s worth.”

Last month loan company Titua launched a bridging product which allows customers to borrow both the cost of purchasing a property and that of refurbishing it.

© Adfero Ltd

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