London, UK (PRWEB UK) 15 March 2013
Specialist financial brokerage firm, Hanover Square Brokers announced today that they are witnessing a huge surge in interest in short term bridging loans for commercial and residential properties since the beginning of this year. This contrasts with the recent news that mortgage approvals last month fell by 11%, their lowest level since July 2012.
The announcement from Hannover Square Brokers is a trend reflected elsewhere in the industry. The Association of Short Term Lenders (ASTL) announced last month a 23% increase in applications for the last quarter of 2012 with a total value amounting to £1.3 billion. A Hanover Square Brokers spokesperson said: “The increase in applications reflects that the need for bridging finance will remain and demand will continue to grow despite the effect of the Government’s Funding for Lending Scheme and increased bank lending”.
The sluggish state of the UK economy and cautiousness of large lenders in approving mortgages has increased the popularity of bridging loans as an alternative short-term source of finance of businesses and individuals to fund commercial and residential property acquisitions. Bridging finance is intended as a short-term funding option in order to bridge a gap between the next stage in financing. Typically they are more expensive than conventional lending options because of the increased risk associated with the borrowers.
Another reason for their popularity is that they can usually be arranged very quickly, with little documentation to fund real estate purchases and take advantage of opportunities, otherwise unavailable. Additionally monthly lending rates are averaging 0.65% for a standard bridging loan, which has made them a viable and competitive option for a large number of investors. This will continue a trend in 2013 that is making bridging loans a serious funding option rather than a method of last resort among businesses and property professionals.
With the continued cautiousness of banks towards lending to businesses, the bridging loans industry has the potential to support a return to sustained growth of the UK economy and this is reflected in the continuing interest in Hanover Square Brokers services.
About Hanover Square Brokers:
Hanover Square Brokers is a specialist financial brokerage firm that deals with bridging finance for commercial and residential property purchases. As one of the best-established brokers on the market, they have formed long-lasting partnerships with some of the UK’s leading bridging loan lenders. This has allowed them to source extensive fund with immediate notice at the lowest rates for their clients.