Falling asking prices and greater competition between sellers could create opportunities for property investors able to use bridging finance to complete purchases quickly, according to Approved Business Finance.
The broker says investors may be in a stronger position to negotiate discounts where vendors prioritise speed and certainty of completion rather than simply accepting the highest offer.
It follows a 2% fall in new seller asking prices during August, the largest August decline recorded for eight years.
Approved Business Finance also points to figures suggesting the average landlord purchasing a property in July paid 88.7% of its original asking price.
SPEED AND CERTAINTY
The broker says cash purchasers traditionally have an advantage where sellers want a quick and certain transaction, but investors using bridging finance can potentially compete without having the entire purchase price available in cash.
Bridging can provide short-term funding to secure a property before arranging a longer-term refinancing exit or completing another transaction.
However, Approved Business Finance warns that lender approaches to below-market-value purchases can differ, including how the purchase price and valuation are treated when calculating borrowing limits.
That means investors need to understand how a proposed lender will assess a discounted purchase before committing to a transaction.
‘ACT DECISIVELY’
Kelly Moody (main picture, inset), senior property finance broker at Approved Business Finance, says: “Cash buyers naturally hold an advantage when sellers look for speed and certainty on below-market-value deals. However, property investors don’t necessarily need to have the full purchase price available in cash to compete.
“By utilising bridging finance, investors can unlock capital in days rather than months, matching the speed and certainty of a cash buyer to secure discounted properties before the opportunity slips away.
“At Approved Business Finance, we have access to a large and diverse range of property lenders who understand below-market-value purchases.
“Rather than relying on rigid, single-lender criteria, we match each property deal with lenders willing to assess true market value and lend flexibly.
“That agility allows investors to act decisively without losing high-potential deals to cash buyers.”
