Market Financial Solutions (MFS) has completed two separate bridging loans in the past month to clients buying properties at auction.
An auction buyer must typically pay a 10% deposit and then has 28 days to provide the remaining money.
In the first instance, MFS delivered a £120,000 bridging loan for a client who was at risk of missing the payment deadline. The loan was issued within four days of receiving the enquiry, which was deployed with a loan to value (LTV) rate of 39%.
In the second case, MFS deployed a £360,000 loan with an LTV of 70% for a client buying a £515,000 property at auction. Using their own finance, the client will be dividing the property into two separate dwellings and listing both back on the market for sale within 12 months of purchase.
Both the clients received loans under MFS’ new bridging rates.
Paresh Raja, CEO of MFS, said: “We have seen a noticeable spike in the number of prospective homebuyers looking to purchase properties at auctions in recent years. There are a variety of factors for this; not only do auctions protect the buyer from gazumping and gazundering tactics, the short completion period of just 28 days means purchases can go through quickly.
“Given the speed and flexibility of bridging finance, MFS regularly receives enquiries from brokers asking how their clients could use our loans to successfully complete on a property purchase at auction. Both these cases demonstrate our expertise in delivering finance within the strict deadlines experienced for auction buyers.”