Vital Role Of Short-Term Finance For Overseas Property
Vital Role Of Short-Term Finance For Overseas Property
Overseas property can represent a good investment, with the combination of the strong pound and low prices in emerging tourist destinations. However, the complexity of foreign property markets can mean that linking up financing with the house-buying process abroad can be difficult to achieve.
In cases where funds are needed earlier than expected, buyers can be caught out, which is where bridging loans can help to secure that dream property abroad.
Many Britons are seeking investment opportunities and homes in Europe – and beyond – because of continually rising UK house prices, and the low cost of property in nations committed to developing their tourism industries. What many buyers do not foresee is the complicated buying process, which is compounded by language barriers. This results in a general lack of information, and can lead to unwelcome surprises such as early payment dates.
Bridging loans can be an important part of this process. There are specialist brokers that can help, but they can become costly and while the Internet is a valuable resource, it ultimately lacks the local knowledge to give you the confidence you need. Many buyers can successfully ‘go it alone’, but they do require a contingency, should they run into any unexpected circumstances.
The flexibility and speed of bridging loans make them a helpful tool in situations where a deposit or full payment are required before the completion of a mortgage, or in the sale of a currently owned property – all that’s needed is a UK property to secure against. Competition for property purchase can be fierce where a bargain is on offer, and funds are often needed right away. This can particularly be a problem in an overseas investment, where purchasing processes, agents and banking systems are unfamiliar, and someone ‘on the ground’ can offer a quicker deal.
Growth in properties abroad– a sound investment
Four years ago around 170,000 Britons owned property abroad. Now one million Britons own second homes in Spain and France alone. Florida, Portugal, Italy and, more recently, Cyprus, Greece, Bulgaria, Croatia and Turkey, are all popular destinations for those seeking summer sun or a change of lifestyle. The sustainability of low-cost airlines means that foreign investments are viable in more and more countries.
Mintel reports that 62 per cent of the almost 70 million holiday trips taken abroad by Britons in 2007 were to self-catering accommodation. Because of this high level of tourism, studio apartments in countries like Bulgaria represent a very sound investment at as little as £32,000. But very few private investors will know the ins-and-outs of the Bulgarian housing market.
For many property buyers, whether in the residential or commercial market, a mortgage from a traditional high street lender may be sufficient for all their financial needs. Few buyers will be aware of the alternatives available, simply because there has never been that need. If a buyer is able to find their dream home, and arrange a mortgage for it, they could still face the prospect of losing it if funds are not available at the right time. A bridging loan can create enough time, bridging the short-term gap between the purchase and the longer-term financing. Borrowers can buy their dream home and then simply repay the bridging loan when their mortgage comes through.
Overseas Development
For those looking to build and develop a property abroad, a bridging loan can provide the finance for land purchase, or the renovation of an existing property, prior to onward sale. Bridging loans can alleviate cash flow difficulties that would otherwise stop this happening – as long as they can be secured against a property in the UK.
If property investment is on a larger scale, short-term finance can help prevent heavy penalties that result from missing scheduled loan repayments or the completion dates of off-plan investment purchases. Alternatively, buyers can take advantage of favourable currency exchange deals, and secure funds in advance to reduce the actual cost of the purchase.
Making Life Easier
For buyers who find themselves in a cash flow emergency, speed is essential to stop a deal falling through. Bridgingloans.com is a market leader in the short term finance sector; it provides rapid turnaround times on loans – typical completion of just five working days – in combination with market leading rates and expertise. As a principal lender, it also has the flexibility to assess a wide range of applications.
Bridgingloans.com also offers loans between £30,000 and £10 million, with repayment periods of one to 12 months, with finance for overseas purchases secured on a UK property.
For further information:www.bridgingloans.com
For more information: info@europeanbusinessexpress.com
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