As lockdown measures begin to ease, we have found a steady increase for bridging finance relating to downsizing and chain-breaking scenarios. Clearly the SDLT holiday is encouraging the property market to move.
The biggest blocker of downsizing we come across tends to be borrowers who cannot raise enough funds for the purchase price of their new home right away.
It is also worth bearing in mind that not all individuals looking to downsize are headed towards retirement. According to the Office of National Statistics, the number of people claiming unemployment benefits jumped to 2.7milllion between March and July this year. With this in mind, another popular reason to downsize may be to raise funds or free up some capital to clear outstanding debts amid economic uncertainty. Or, as it’s difficult for first-time buyers to get on the property ladder, borrowers may want to help their children build a deposit for their first home.
There are a couple of factors we suggest keeping in mind when looking to downsize. Firstly if you are looking to relocate, be sure to factor in the average costs of living in for region you are moving to. According to Zoopla, coastal regions tend to be the most popular tourist destinations and retiree hotspots in the UK. This typically means the cost of living and property prices in these areas also tend to be higher.
Our straight-forward bridging criteria is suited to help support those looking to move house and ease the stress of the process. If the borrower has additional security, we can offer up to 100% of the purchase price for their new home. Also, we do not ask for income requirements which means we can cater to those outside the working population. In particular, this works well for pensioners as serviceability is not a requirement as our bridging loans have no monthly payments, loans are redeemed with a bullet of interest and capital at exit when the property is sold.