MS Lending Group has launched a new bridging product aimed at property investors, which seeks to address the issue of cash being tied up in purchases even when a bargain has been secured. The product, described as a below-market-value bridge, is designed to recognise property discounts.
The new offering provides up to 90% of the purchase price for qualifying residential deals and up to 80% for commercial and semi-commercial acquisitions. However, these percentages are subject to specific caps based on the property's market value.
For residential properties, the maximum loan is the lower of 90% of the purchase price or 70% of the lender-accepted market value. This means that to receive the full 90% of the residential purchase price, the price must be no more than 77.78% of the accepted market value, requiring a discount of at least 22.22%.
Similarly, for commercial properties, the maximum loan is the lower of 80% of the purchase price or 60% of the valuer’s 180-day value. The full 80% of the purchase price is available only when the price is no more than 75% of the 180-day value, equivalent to a discount of at least 25%.
The product could be useful for direct-to-vendor and off-market purchases, probate or part-exchange transactions, portfolio acquisitions, and deals with motivated sellers. Desktop valuations may be used on commercial gross loans up to £500,000, and on residential cases, AVMs may be used on gross loans up to £150,000 and desktop valuations on loans up to £750,000, subject to underwriting.