A resurgence of traditional bridging and personal service

Some bridging lenders are better suited to specific uses as they are restricted by their products or processes. As many lenders don’t publicise their product guides, it can be hard to know their true appetites. That’s why we believe in transparency - you can find guides showing criteria and interest rates for all of our products on our website.

The evolution of bridging finance

When we set up Funding 365 over a decade ago, the uses for bridging finance were predominantly linked to speed. Auction purchases with a week remaining before completion deadline or loans for portfolio landlords needing extra time to apply for new long term facilities, for example. Often these traditional uses involved some kind of light refurbishment element.

In the years since, other uses for bridging finance, such as development exit and commercial-to-residential heavy refurbishment conversion, have risen to jostle for dominance.

Interestingly, in the past few months we’ve noticed a levelling off of these newer uses and a resurgence of the traditional ones. Nearly 50% of our bridge completions over the past month have had a light refurbishment element to the project, either funded by the borrowers or by us.

This trend may be more visible to us at Funding 365 because we’re highly competitive in this area of the bridging market. Our Residential Bridge, with interest from 0.69% per month, allows borrowers to complete light refurbishments with their own funds. Our Light Refurbishment product, which funds works with a value of up to 40% of the day one property value, also starts at just 0.69% per month.

So what opportunities does this trend suggest might be arising for our clients?

Auction purchases

The Essential Information Group’s National Auction Survey confirms our experience of an increase in property auction activity. They found that in July 2024 there was an increase of 41.7% in lots sold nationwide compared to the same period in 2023. The North East of England took the top spot, with an increase of 67.6% in lots sold this July versus last year.

With just 28 days to complete an auction purchase or lose the 10% deposit, bridging finance can be an excellent source of funding. Many bridging lenders are able to complete at speed, although it does depend on their source of funding and whether they control their credit in-house.

At Funding 365 we have a number of institutional funding lines, but as our funding is principal-led we have credit autonomy. This means that we can move exceptionally quickly. We even aim to send credit-backed terms within just one hour of receiving a full enquiry.

HMO conversions

We’ve also seen a notable increase in enquiries from borrowers looking to purchase houses to convert into HMOs in order to lease them to housing associations. This has likely stemmed from the Government steps to combat the problems that are being caused by the chronic lack of housing combined with a relatively rapid population growth.

These residential to HMO conversions usually require only light refurbishment, so fit within our Residential Bridge or Light Refurbishment products.

The right lender

The good news is that if you or your clients are wondering if a business opportunity can be facilitated by bridging finance, you can always speak to a Funding 365 underwriter to get an expert view.

We’re unique in the industry in that we have an underwriter-first approach, whereby we encourage everyone to speak directly to one of our decision-making underwriters with their enquiries. If you progress with one of our loans, the same underwriter will manage it all the way through to redemption, which delivers a swift, seamless, certain experience for everyone involved.

Our efficient, personal service has won us multiple industry awards and we’re very happy to work with all intermediaries. Just give us a call to speak to one of our underwriters who can give you a full answer, quickly.