If you are purchasing a property that has less than ten years left on the lease, you may be able to buy it at a discount rate, but you may not be able to get a mortgage to finance the deal. There are many properties in Central London that have leasehold rather than freehold leases. An alternative to a mortgage, if you can afford to repay the loan within a year to 18 months, is a bridging loan. This provides funds for up to 75% of the purchase price. If you own other property, you may be able to use that for additional security to increase the amount you can borrow. If you already own a leasehold property that has less than 80 years left on the lease, you may be able to purchase a lease extension. A bridging loan can be used to secure the extension and then the added value in the property could be used to remortgage. You could purchase a short-term leasehold property as an investment. After using a bridging loan to extend the lease, the property can be sold for a profit. Bridging loans to buy property or extend leases can be arranged quickly, often in less than 14 days. If there is a deadline to complete a purchase more quickly than this, a lender may be able to complete the loan application in less than a week. A bridging finance broker will advise you on buying short lease property and find the best suited bridging loan deal for you.
May 10, 2022
