UK home buyers are turning to less conventional finance methods to buy their own home. In a survey commissioned by bridging lenders Market Financial Solutions (MSF), a fifth of those questioned (19 percent) said they’d looked for alternatives to a mortgage lender when purchasing property.
The alternatives included crowdfunding, unregulated loans and mezzanine financing, a complex type of business funding. Many of the alternative financial products, including bridging loans, are seen as short-term solutions to allow a quick purchase.
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Mortgage not the only option
MSF asked 2,000 adults across the UK to reveal where and how they had found the cash to buy a home or invest in property, and which factors had influenced their decision.
In its findings, it was revealed that, since 2000, 42 percent of people who have bought a residential property have been cash buyers, while 52 percent have used a mortgage or remortgage.
Almost one in five (19 percent) looked beyond traditional lenders for different options, a figure that rises to 29 percent for those in the 18-34 age bracket.
Meanwhile, 13 percent of homebuyers had used a bridging loan when they bought.
More than a third (37 percent) said they had relied on a broker to outline the financial options that were available to them, with almost half (46 percent) admitting they had neither the knowledge nor the confidence to look for anything other than a traditional mortgage to buy a property.
Open to using flexible products
A quarter (24 percent) said they were open to using other flexible financial products but admitted they feared they would lose out on the property they wanted if they spent too long choosing which credit to go with.
According to MSF, the alternative finance industry in the UK is worth more than £4.6 billion, making this area a potentially fruitful one for those struggling to secure a loan from a traditional lender.
Paresh Raja, chief executive at Market Financial Solutions, said: “Over the past decade, a range of new alternative finance products has arisen to give buyers different options that might be better suited to their needs – however, today’s research demonstrates that there remains a lack of understanding about what these options are and how to use them.
Successful buying with Homeward Legal
Securing your finance is only one element in the buying process. To ensure a successful transaction, you need a proactive conveyancing solicitor on your side. Homeward Legal works with the best property lawyers across England and Wales to deliver high-quality, value-for-money conveyancing services.
Call our team now on 0800 038 6699 to get a fixed-price quote that’s transparent about all the costs involved. You can also get an instant, no-obligation quote for conveyancing services.