Funding for commercial property acquisitions in Yorkshire remains challenging but the situation is improving. We have, for example, recently sold a mixed investment (retail and residential) property in Bradford where the buyer obtained funding from Lloyds Banking Group. Other mainstream banks are also showing a willingness to lend on commercial property if the criteria are right.
Owner-occupier sales are proving to be one of the easiest deals to fund, and this can include those run as income-producing businesses, such as serviced office complexes run as business centres, where the Landlord provides a wider-ranging offer to occupiers than normal. We recently agreed the sale of an industrial property in Bradford where the buyer will be an owner-occupier, with funding from Lloyds Banking Group (subject to valuation).
For those investors who are choosing to buy at auction, there is the option of using bridging finance which then converts into a longer-term loan from a mainstream bank, provided the property offers an early part disposal angle to exploit.
Bridging loans can be utilised for a wide variety of property including residential flats, houses, industrial, retail etc. This type of loan can typically be arranged in a matter of a few days, which is essential in an auction situation where bidders are under strict timescales. The bridging firm will expect the borrower to have a large enough deposit – typically 35-50%.
The borrowing rate is high, typically 1.25% per month along with arrangement fees of up to 2% and first / second charges being applied on the title, but this type of arrangement could still be worthwhile if the property can be worked to make a healthy short-term gain.
If you’re a buyer and have not yet secured funding for commercial property, Andrew Idle Associates we would be happy to put you in touch with independent financiers or consultants who may be able to help.