The Intermediary – September 2025 - Flipbook - Page 64
SPECIALIST FINANCE
Opinion
Unlock more
property deals
with bridging
T
he UK property market
rarely stands still,
but right now, those
moving parts are
particularly dynamic.
Foreign ownership
of UK property is on the rise, with
the latest Benham & Reeves figures
showing 189,793 homes now in
overseas hands, a 2.6% increase in just
a year. Hong Kong, Singapore, the
United States and China remain the
dominant players, with China posting
the sharpest growth at +12.9%.
This isn’t a one-way street. UK
investors are increasingly active
overseas, seeking returns, lifestyle
properties, or strategic diversification
in markets from southern Europe to
North America. These cross-border
flows are shaping demand for fast,
flexible finance and bridging can be
a useful tool to get deals like these
over the line.
In the UK, a slower market has le
many property sellers in limbo – or
forced to question their desired price
and drop to a more realistic level.
The Bank of England cut interest
rates from 4.25% to 4% in August. It
is the fih reduction within the last
12 months and takes rates back to
where they were in March 2023. This
will stir buyer activity, especially if
further cuts come this year. But in the
meantime, bridging has always been
one way to unlock stalled transactions.
Specialist sectors are also in flux.
Since the post-pandemic holiday let
boom market, holiday let licensing
has seen some lenders exit the
market, while others have tightened
criteria. For borrowers who need
to refinance, refurbish or purchase
in this sector, bridging may be the
solution where mainstream appetite
has cooled. Meanwhile, the buy-tolet (BTL) market is quietly regaining
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The Intermediary | September 2025
momentum. With average rental
yields now at 7% and mortgage rates
down to 5.09% for new BTL loans,
demand is particularly strong in cities
like London, Bristol, and Glasgow.
The right opportunity
This combination of market
opportunity and constraint is fertile
ground for bridging, particularly
when a lender can look across asset
types and respond quickly.
Recently, we supported a client
who owned a commercial warehouse
but wanted to raise capital to fund
the development of four new flats in
London. Traditional funding routes
would have required either selling
the warehouse or arranging longform development finance. Instead,
we were able to take security over
the commercial asset and advance
£614,250 at 65% loan-to-value (LTV),
releasing the funds in time for works
to begin.
This ability to straddle commercial
and residential purposes shows the
breadth of options brokers can offer
when they work with a lender with
multi-asset expertise.
Bridging is also proving increasingly
valuable for those aforementioned
internationally minded investors. One
experienced landlord recently sought
to buy property abroad but needed to
release funds quickly from an existing
UK buy-to-let to secure the deal. By
using an automated valuation model
(AVM), we kept valuation costs low
and advanced £650,000 at 65% LTV,
secured solely against the UK property.
The refinancing was completed
swily, enabling the overseas purchase
and expanding the client’s portfolio
beyond the UK. In a climate where UK
investors are becoming more globally
active, this kind of cross-border agility
is only going to become more relevant.
ROZ CAWOOD
is managing director of property
finance at StreamBank
Work the deal
What underpins each of these
examples is the same set of strengths.
The ability to lend against residential,
commercial, or mixed-security
portfolios; the flexibility to use AVM,
desktop or full valuations; and the
consistency of competitive pricing.
The inclusion of title insurance also
removes many of the common legal
bolenecks, meaning completions can
happen in weeks, not months.
For brokers, this means more
solutions to present to clients. For
clients, it’s about certainty. That’s the
certainty they can secure the property,
release equity, or move their project
forward on time.
Looking ahead, the interplay
between domestic and international
property investment is likely to
intensify. The UK remains aractive
to foreign capital, with robust rental
yields and a currency that still offers
relative value to overseas buyers.
At the same time, British investors
are continuing to look outward,
particularly in response to domestic
tax changes. If the Bank of England
makes further rate cuts before
year-end, we could see even greater
transaction volumes, but speed and
flexibility will remain at a premium.
Bridging is uniquely placed to
deliver in this environment. It’s not
just a stop-gap or a last-resort product.
It’s a strategic tool that can unlock
opportunities and navigate market
complexitiesb In a market where
timing can make or break a deal,
having the right tools for the job
and the right partner to deploy them
is essential. ●
