LendInvest limits bridging LTVs and cites importance of exit strategies
LendInvest has limited the loan-to-value on its regulated bridging loans, as it looks more closely at exit strategies in uncertain economic conditions.
The specialist mortgage lender’s head of bridging finance, Leanne Ardron, said that “while regulated bridging is an option for homeowners right now, it is not and never has been a long-term one.”
“We don’t want to create a situation where borrowers can’t refinance at the end of the loan term because they don’t meet mortgage affordability requirements,” she added.
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“So looking at the affordability and exit strategy at the end of the loan helps inform us how we can best support them.”
The UK housing market has been under pressure of late, due to consecutive rate rises from the Bank of England in a bid to reduce inflationary pressures on the economy.
Data this week from Nationwide showed that average house prices fell at their sharpest rate for 14 years last month.
“Lenders, developers, investors and landlords need to continue to make headway in the market, but also need to have flexibility built in so that they can manage an exit strategy that might be into a very different environment by the time the loan term ends,” said Ardron.
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“Because of its speed and flexibility, bridging is often considered a stop-gap financing that allows for short-term solutions,” she continued.
“In the current market, that isn’t necessarily an option as the short-term changes so much.
“Therefore flexibility, understanding and a long-term view from every party involved in each deal is necessary to secure people the right funding and the right outcome.”
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