UK landlords making record use of bridging finance
UK landlords made use of £640 million in short-term secured loans between September 2012 and 2013, according to West One Loans. During July and August, bridging loans for buy-to-let purposes totalled £194 million, a record high. The size of the average bridging loan was £450,199 over July and August, up from £408,214 in the previous two months.
Duncan Kreeger, director at West One Loans said: “Landlords don’t just need mortgages. To expand portfolios, landlords are increasingly converting properties from other uses or from a dilapidated state. That’s vital for a growing rental market and it’s a huge economic opportunity. But this type of lending is not supported by most mortgage lenders. There’s a serious gap in the financial system.
“The trouble is that standard mortgages were never really set up for that sort of loan, and the financial crisis has made lending criteria even stricter. For example, it’s practically impossible to get a high street mortgage on an ex-office or a flat with no bathroom. Short-term, secured loans increasingly bridge that gap.”
Prices in Glasgow and west of Scotland
Despite a sharp increase in sales, average property prices in Glasgow and the west of Scotland are still lower than they were at this time last year according to the latest figures from Glasgow Solicitors Property Centre.
Sales between July and September were 17% up on the same time last year and 5% higher than in the previous three months. Selling times have also shortened and are now 16% lower than they were this time last year. Homes are now selling, on average almost three weeks faster than they were a year ago (95 days in 2013 compared to 114 days in 2012).
Despite this increase in activity, average prices are now over 6% lower than they were at the end of September last year. The average price of a property in west central Scotland is now £116,000, almost £8,000 lower than 12 months ago. Prices are now at early 2005 levels, around 19% below their 2007 peak.
GSPC Chief Executive, Mark Hordern, said: “It is clear that talk of a house price boom is fundamentally flawed. Sales and selling times have been steadily improving this year, but selling prices have yet to respond in most areas. It will take a long time for the market to recover in terms of transactions or price and any change is likely to be patchy, with some locations experiencing better conditions long before others. Nevertheless, the signs are that we will see a steady improvement in the market from here.”
Total wreck for sale
Agents Crayson are being spectacularly honest in the details for their latest property, a three bedroom terraced house in Abingdon Road, Kensington, which is on the market for around £2 million. They describe it as ‘Wrecksville’ and a particularly rare chance to buy a ‘blank canvas’ in Kensington with ‘massive potential’. The property features a back gate.
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