Saturday, July 20, 2024

Are Bridging Loans Available to Borrowers in All Parts of the UK and for Overseas Purchases?

When looking for a quick funding option with suitable interest rates, it is worth considering bridging loans due to its speed of arrangement and flexibility in eligibility criteria. It has become a popular funding option all across the Uk, and many p2p lending platforms also offer this type of loan to attract more customers.

But you may have a question: Are there some areas in the UK where securing bridging financing is easier than in other parts? In this article, we will look at different regions of the UK where it is more likely to get approved for a bridging loan application and where it may be challenging. Furthermore, we will also discuss how likely a lender will allow potential buyers to use bridging finance to buy property overseas.

Although bridging debts are available in all areas of the UK, some lenders place restrictions and various rules in some areas of London, Northern Ireland and Scotland.

Now let’s have a detailed look at bridging loans in different regions of the UK.

Bridging Loans in London

Like other major cities in England, such as Liverpool and Manchester, Bridging finance is readily available in London. Since there are a large number of bridging loan providers in London, it is challenging for borrowers to find the best one. To get a loan with the best rates and find bridging finance products that meet your requirements, it is essential to take services from experienced brokers. These brokers have whole market access and provide you with a wider choice of options. 

Typically bridging lenders in the U will cap the LTV at 70-75% for low-risk borrowers. However, they reduce this value to 50% and 65% for high-risk borrowers. It means that the borrowers have to pay a 35-50% initial deposit, which is a huge amount.

Lenders are offering 100% LTV, but these are only a few in number, and they need additional security, which results in extra valuation fees.  

No matter where you live in England, the best way to find suitable rates is by offering the lender the lowest risk factor. So, whether you are in London, Blackpool, or Newcastle, lenders assess how you meet their approval criteria. 

Unlike traditional loans, bridging loan applications are assessed on an individual basis. If you want quick approval, you will have to look at the following:

A Strong Exit Strategy  

An exit strategy is a way that describes how a borrower is going to repay the loan at the end of the loan term. A lender will only accept your application with a viable exit strategy.  

When bridging finance is used to purchase a property or renovate or refurbish a property, the typical repayment method that is used is a long-term mortgage or sale of the property.


Another factor that needs to be looked at closely is the location of the development or upgrade. The location of the property is taken into account to find the viability of selling and how long it will take to sell. The lender will consider different things like transport, road links and local schools to know the project’s profitability.        

Experience In Property Development

Although it is optional to have experience in property investment and development for your bridging loan application approval, lenders are more likely to offer loans to borrowers with a proven track record in this field. It does not mean that lenders will not consider first-time investors.

Lenders may ask you to show evidence of past projects before approving your application to ensure they have succeeded.

Financial History

As a bridging loan is a secured loan, it is optional to have a perfect credit history. You can get approval for bridging loans if you have a strong exit strategy. But when it comes to interest rates, borrowers with clean credit are able to get low-interest rates.

Bridging Loans In Scotland  

If you are looking to take funding for a project north of the border, you have to find specialist lenders, as most of the lenders do not offer bridging loans in Scotland. And those who offer loans in these areas may have more restrictions.

Lending criteria for the Scottish mainland may be comparable with those in England unless there is any complexity in development. Land Purchases in Scotland are riskier, which is why it has a higher LTV than the other projects.

A broker can help you find a lender providing bridging loan services in Scotland.

Bridging Loans In Northern Ireland

Like Scotland, getting a bridging loan in Northern Ireland is problematic because of similar restrictions. It is mainly due to the need for lenders willing to offer loans in this region of the UK.

One way to get funding in these areas is to apply for unregulated bridging loans. But it is imperative to get professional advice before taking out this type of loan.                

Bridging Financing For Overseas Properties

Apparently, it is not possible to arrange bridging loans for overseas property, but you can struggle to find a lender willing to do this. Only a few will, but they are typically reached through a specialist broker.

Most lenders need a substantial asset as security. For example, you can use your UK property as collateral against bridging loans for a property that you like to buy in Australia. You can repay this loan amount by using an international mortgage product. You must have a strong exit strategy for a bridging loan UK for overseas properties. Otherwise, it becomes impossible to get approval.  

Some specialised lenders are offering to bridge overseas properties that you are buying to let out. Bridging finance for overseas properties is not only available for individuals but also for limited companies.  

Final Thoughts

Bridging finance is a beneficial funding solution providing quick cash access to borrowers so that they can fulfil their emergency financial needs. Bridging lenders and p2p lending platforms are offering loans all across the UK. However, there are some regions like Scotland where it can be problematic to secure a loan. If you take the services of a reputable lender, you can find the best deal in any region of the

UK and also for the purchase of properties overseas. 

Claire James
Claire James
Claire is an accounts manager at Fire Digital UK, an online publishing and content marketing company based in the North West.

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