The outlook for 2013 with regards to bridging loans, development finance and secured loans
The Christmas break is a great time to consider what the next year is likely to hold in store for an industry that is still trying to recover from all the problems that it has experienced during the past four years. The team at KIS Bridging Loans have all been involved in the finance industry since at least the 90s, so have had to get used to dealing with all sorts of changes from economic to regulatory. Being well prepared to deal with the coming years business is important so that we can continue to run efficiently and ensure that we keep providing our customers with the best finance deals available. We therefore have to look closely at how the buy to let mortgage, secured loan, commercial mortgage, development finance and of course bridging loan markets are likely to change over the coming years and in particular throughout 2013.
For various reasons the bridging loan market has experienced significant growth over the past couple of years. Because other finance facilities are unlikely to change that dramatically over the next 12 months, and with bridging lenders becoming even more competitive, and also more interested in taking into consideration customer requirements in order to provide more suitable bridging loan facilities, we expect this growth to continue and are therefore preparing ourselves accordingly.
We also expect to see the secured loan sector to continue to grow at a healthy rate. The secured loan industry was virtually wiped out following the credit crunch, with many lenders leaving the market. Those that remained dramatically reducing their lending by making considerable changes to their lending criteria. Recently more lenders have returned to the market and secured lending has seen a healthy growth during the last twelve months. In addition one of the main secured loan lenders has increased their maximum loan size from £100,000 to £250,000 and also introduced a rate of just 5.59% APR, one of the lowest rates ever seen for a secured loan! With lenders recognising that this is a profitable market for them there will surely be plenty of business written during 2013, especially since secured loans provide an excellent alternative to a remortgage when looking to raise money for home improvements and debt consolidation. With remortgages still being hard to obtain plus unfavourable rates, a secured loan can be a very attractive option, especially if these lenders are reducing their rates.
It is hoped that the construction industry will experience some positive growth during the next twelve months. New government policies and incentives will hopefully help this industry experience some positive growth, having been hit so hard over recent years due to the UKs financial problems and more recently the poor weather. Growth here will mean a growth in development finance, and although there are many lenders still with some demanding criteria, there are many new options available that can provide the development finance required for new projects.
Many businesses are still finding it hard to obtain commercial mortgages from the high street banks. Hopefully 2013 will be the year in which the high street will look more positively at providing commercial loans and mortgages. However, if they don’t be reassured that there are other options available from alternative lenders who are keen to make commercial mortgages and loans available to businesses. The last twelve months has seen new alternative lenders enter this market and there is no reason why this won’t continue over the next year, meaning more available options to choose from and better deals.
The whole team at KIS Bridging loans is looking forward to 2013 as we believe it will be an interesting and busy year. Hopefully this will be the year in which the UK turns the corner and starts to look forward and enjoy some financial recovery!