With Commercial Mortgage lenders still very much cherry picking what they will and will not lend on, and then increasing the interest rate margins together with an increased fee structure thank god that we still seem to have short term lenders who if anything have become more competitive on interest rates and charges.
This is not quite what we expect from the this sector of the market when we look back prior to the down turn in the Commercial Property Market where bridging and short term lenders were like drinking in the last chance Saloon, if you did get served the drink it was pretty foul tasting stuff and very expensive.
What the downturn in the market has done is create a niche market for this product, and thank fully there seems to be funds available from a number of lenders with terms that have become more attractive as the Commercial Mortgage drought shows no real signs of improvement.
It is also very noticeable that short term lending which started at one day has now with some providers stretched to 365 days. Developers would have turned their noses up previously at bridging, but have now come to realize that where you are buying property way below the true market value, you can afford to spend a little more on the cost side and still have a very nice profit margin.
These are testing times and it will be very interesting to see how these short term products develop in a changing market as we come out of the downturn where property developers have normal funding available, speed and a very minimum of references has always been the key to bridging and not losing that very important deal where time was in short supply.
Michael Alexander acommercialmortgage4you.co.uk
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