Savills: 100% bridging loans too risky
The downturn in the property market could mean that 100 per cent bridging loans are "too risky" for lenders and borrowers, according to one Estate Agent.
London Estate Agents Savills said that 100 per cent bridging loans will not be popular with lenders or borrowers during the current climate.
"Lenders are going to be more cautious than ever and borrowers should be as well," said Melanie Bien, a director of Savills Private Finance.
Bridging loans require borrowers to move off of it as quickly as possible to a regular mortgage but this may be increasingly difficult during the housing crisis.
Ms Bien went on to explain that borrowers may be stuck with an expensive loan that they cannot pay off. This means that more people could be tempted to look for property to rent in London.
Bridging loan company Tiuta said last week that its products have been undervalued by 40 per cent compared to their open market value.
"I would have thought now is possibly the worst market in which to have this sort of product," Ms Bien concluded.
Savills is the UK's largest property consultancy business. It is a London Estate Agent also provides advice on overseas property.
Published 11th July, 2008
© 2008 Estates IT Limited
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The downturn in the property market could mean that 100 per cent bridging loans are "too risky" for lenders and borrowers, according to one estate agent.