International bridging offers a solution for clients who require short term finance, but the majority of borrowers aren’t aware of it as an option. The most common reason for international bridging loans are to release equity in the short term – for example, whilst waiting for a property to be sold, or to fund renovation work – something which is rather uncommon in Europe.
In Germany, for example, lenders cannot charge over twice the interest rate on a loan. Whilst in Spain, property is often passed from family to family, rather than being seen as an investment. There are also some countries where obtaining an international mortgage using sterling income is not possible. Issues such as these lead to a reluctance among lenders towards short term loans as they are perceived as too risky.
In Europe, releasing equity would only usually be done in order to purchase a property whilst waiting for the current property to sell. Property in the UK is viewed as a long term investment with the opportunity for capital growth so lenders take a more liberal approach, considering a client’s entire financial situation when assessing the potential risk. As such, they are far more willing to lend on international property in the short term.
Enness’ unique infrastructure enables us to provide clients with a bespoke and holistic service, addressing each borrower’s exact requirements. We work with trusted valuers who understand the intricacies of how valuations are written across different jurisdictions and can value your property anywhere in the world. We can also assist clients with support from solicitors, as finding one who can navigate the various legal systems can also present challenges. Finally, our relationship with foreign exchange (FX) specialist Argentex enables us to assist clients whose funds are in worldwide currency. We can help with the entire process and pride ourselves on our ability to do so.
If you are looking for short term finance on your international property portfolio, get in touch with our team of expert brokers who would be very happy to discuss your requirements.