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Bridging loans unlikely to prove popular
10 July 2008
Borrowers and lenders are unlikely to be tempted by bridging loans as the property market continues to slow down, according to financial specialists.
With house prices falling by two per cent in June, according to Halifax, bridging loans will be deemed too risky by both borrowers and lenders as the credit crunch shrinks the housing and mortgage market.
Melanie Bien, a director of Savills Private Finance, said: "We would say it's too risky because of where valuations are at the moment."
Those looking to move up the property ladder are being urged to be cautious as future economic problems are predicted.
"With a bridging loan you need to move off it as quick as you can and onto a regular mortgage, and that's more difficult in this market now anyway," said Ms Bien.
Research by the Council of Mortgage Lenders revealed that the average first-time buyer put down a deposit of 13 per cent in April, which is the highest level in over three years.
