Hope Ive got this in the right section! Apologies if not. I am part way through my third development but have seen a property which is coming up for auction which looks very interesting. As all my money is tied up in my current project, I was considering a bridging loan to hopefully purchase the auction property then mortgage it after purchase to pay off the loan. All my other projects have been purchased in the standard way with mortgages. Does anybody have any experience of bridging loans? Would it be a good idea? Any recommendations of companies offering Bridging loans? Ive never had one before so any advice would be greatly appreciated!

First port of call should be your own bank - they know you and your history so you'll be on firmer ground than approaching a totally new lender (assuming you have a good record with your bank that is!)HOWEVER banks do not like open ended bridging, which basically means they are happier to lend to you where you have exchanged on one sale but not yet completed and need the cash to tide you over on the new purchase for a very defined period (closed bridging).Also closed bridging is usually much cheaper than open ended.

I would look at the finer print before you sign up....

Bridging loans can be dearer than a £500 overdraft facility!!!! check very carefuly the rates and penalties for early/late settlement.

As a general rule of thumb, unless you are a massive developer, this is just another way to drain your cash....you'd probably get a better rate if you went for a personal loan.

I would recommend you stay well away from bridging loans.

The interest is sky high, and if you have delays in selling then the bridging loan is yours for longer and longer increasing the interest even further.