Bridging loans are becoming a popular option for property buyers and sellers looking to avoid the pressure, cost and uncertainty of lengthy property chains, according to new research from lender Together.
The survey found that 28% of homeowners who had used a bridging loan did so specifically to avoid being caught in a chain, with 29% of that group saying it helped make their chain-free offer more appealing to sellers.
Despite the growing use of short-term secured finance, the findings suggest a significant lack of understanding remains among consumers.
One in five respondents said they had never heard of bridging loans, while a further 13% said they did not know how the product works.
Bridging loans typically run for up to 12 months and offer quick, flexible access to funds to help buyers complete a purchase while awaiting the sale of their current home.
They can also be used to buy property at auction or to finance refurbishment projects before refinancing onto a longer-term mortgage or repaying through property sale.
The survey highlights a demand for clearer guidance, with 40% of respondents saying they would benefit from more education on available finance options during the buying process.
A third said that a better understanding of the costs associated with a broken property chain would help them recognise the advantages of bridging finance.
Ryan Etchells, chief commercial officer at Together, said: “While the term ‘bridging loan’ may sound self-explanatory, our research makes clear that far too many buyers and sellers are still in the dark as to how this type of fast finance can help unshackle buyers from stressful and frustrating property chains.
“It is important to help debunk these myths so buyers and sellers are aware that there is a viable option to longer term mortgages to help you secure your ideal home.”
