Data from estate agent Hamptons describes the average home in Great Britain taking 49 days to sell in April, far above the 26 days it was taking on average a year previous. With rates continuing to rise at the time of writing, there is little reason to imagine this trend reversing soon.
And those are just the sales actually going through - Quick Move Now recently put out a report stating that 55.8% of property sales in England and Wales outright failed before completion during the first quarter of this year.
For property investors wishing to expand their portfolios, a reliance on properties caught in a chain risks wasting a lot of time, effort and money.
But there is one area investors can move into: chain-free properties. Not only do these present a far greater certainty of a sale going through, but investors can potentially enjoy greater returns in the long term if they can secure empty properties in need of renovation.
In our conversations with brokers, we find there to be three main types of property that investors are most interested in.
Property in need of refurbishment: This enables an investor to increase both the value of a property and the yield it returns either through a large initial capital outlay or through a sequence of smaller material improvements. As well as enhancing a property's presentation, investors are also able to use this as a chance to future-proof the property against likely incoming energy efficiency regulations.
Property conversions: For example, from commercial use to residential use. Not all properties can be changed in this manner, but those that do qualify often need extensive physical reworking.
Properties at auction: Buyers in this arena need to be organised and well capitalised - typically just a month passes between the publication of an auction catalogue and the auction itself. And buyers will need a 10 percent deposit for any property they successfully bid for on the day and the means to pay the remaining balance within a maximum of 6 weeks.
Not every investor has enough cash on hand to go this route, but that is no reason for them to be frozen out of this dynamic and often prosperous market. Bridging finance serves all three of the methods well. Being able to get a short-term loan underwritten on day one means investors can be confident in being able to raise the funds necessary to purchase these properties and pay for any work required.
We offer these loans at up to 80 percent LTV across a term of up to 18 months. Interest is rolled up, there is no early repayment charge after 3 months - offering even more flexibility. We also offer bespoke pricing for loans with a value north of £5m.
Bridging finance is a product that perfectly matches the flexibility and swiftness that being a property investor in such uncertain time demands.