Short-term property finance lender LendInvest has joined forces with LOT11 to become the funding partner for those seeking to buy property through the online auction platform.
The partnership will see LendInvest pre-qualify select lots at LOT11 auctions which fall within the lender’s criteria. The lender’s logo will appear next to any auction property that it has pre-qualified, allowing bidders and their brokers to see at a glance which properties LendInvest is prepared to lend against.
Summary funding details will be presented alongside other key property information, such as floor plans and legal documents, on the information page for each pre-qualified lot, enabling investors to easily of arranging auction finance in advance of bidding for a property listed by the online auction house.
Matthew Tooth, head of distribution at LendInvest, said: “This exciting partnership reflects the growing importance of auction finance to LendInvest. Both LendInvest and LOT11 are challenging the status quo in our respective fields with the application of sensible technology, so we make perfect partners. This service will help prospective buyers and their brokers move quickly to secure properties that catch their eye.”
The partnership begins with LOT11’s quarterly auction on 27 September. Properties for that auction will be available to view on the LOT11 website three weeks beforehand.
Kevin Coughter, CEO of LOT11, commented: “LendInvest has established itself as a lender which offers a speedy, efficient and flexible service for buyers and sellers who need to move quickly. LOT11 clients are accustomed to achieving fast results and having all of the information they need at their fingertips; this partnership will only enhance their journey with us.”
Demand for bridging loans – short-term secured loans designed to bridge a temporary cash shortfall when acquiring a property – has surged in recent years.
Bridging loans were once perceived as a ‘last resort’ lending option. But with a growing number of borrowers attracted to the greater flexibility offered by alternative finance providers, including no minimum term and no exit fees, it is now expanding significantly faster than the mainstream mortgage market, which grew by 8% in the whole of last year, according to the Council of Mortgage Lenders.
The latest West One Bridging Index reveals that gross annual bridging lending broke through the £3.5bn barrier for the first time in 2015, which is rather impressive given that annual lending failed to even reach £1bn in 2012.
This annual lending figure for last year equates to £13.9m worth of transactions each working day in 2015.
Very few mortgage lenders, amid tougher borrowing rules, are able to provide purchasers with the necessary finance required within the relatively short 21-28 days completion period as is the case at auction, which is one of the main reasons why many auction goers turn to short-term finance lenders for an instant bridging loan.
Auction finance, available throughout the UK, is generally available for property purchases varying from £20,000 to £5m, although these loans do come at an inflated cost.