A Game of Two Halves

September 2, 2016

What will happen with bridging finance after the shocking Brexit Vote?

Ah, those halcyon pre Brexit days, happily ensconced as an important if awkward member of the dysfunctional EU family. A family whose comfort blanket is all that some of us have known. No visas required for our Easyjet holiday to Nice, merci beaucoup

Alas, the storm clouds were gathering on these sepia tinted days, when Chancellor Osborne and his mates at the IMF started their campaign of fear. We were to be in no doubt, the Sword of Damocles was hanging over us all.  If we were stupid enough to vote to leave the good ship EU, then a plague be upon us!

Then June the 23rd happened. Oops.

You could hear the Westminster gasps of breath and sucking of teeth in Aberdeen.   This was not on the script. What the hell was going to happen now?

Somewhat bizarrely, nobody had a clue. There was no plan B –rexit.  One of the largest and most sophisticated countries on the planet, didn’t actually think to jot down a few ideas on the back of a fag packet, on the off chance that the vote just might be to leave the EU.

This post referendum shock was also felt in the finance markets, including with our bridging loan investors. The weekend following the vote, saw frantic board meetings across the country, with the general consensus being to sit on hands and see how the dust settles. This period of uncertainty in July, was followed by the usual evacuation in August – (have you ever completed a property deal in August? – thought so). However, now that September is upon us, it looks like Mr Osborne and his mates were wrong – big time.

A combination of record low interest rates, a forthcoming change to the tax relief on buy to let properties from April 2017, and tougher affordability checks in the pipeline from the Prudential Regulation Authority, mean that the bridging loans market is buoyant, and set to continue apace.

This regulatory confluence of events, compounded with recent positive announcements from the major housebuilders, and a surge in the UK Construction Index, has added wind to the sails of the property market, creating a generally positive consensus on the future.

We do have concerns on some areas of the market. With inner city London becoming saturated with buy to let investment properties, and the top end ultra-prime market having its own problems; there is still cause for careful navigation in these unpredictable waters.

However, at Tiger Financial, we are looking forward to the future. Our funding lines are open and we are ready to do business!

This article was written by Matthew Dailly, Managing Director of specialist bridging loan company Tiger Financial.

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