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Europe is seeing its own ‘Californication’ with lifestyles of upwardly mobile and successful people becoming more dynamic, multi-location and, indeed, multi-jurisdictional.
In the US it has been recognised for a long time that successful people aspire to own properties in the country’s hotspots. Europe is following suit.
The US banking market is highly agile allowing customers to take their property finance anywhere in the country.
Whilst the specialist lending market has been thriving for a number of years in the UK, real estate lending in Europe has still been heavily dominated by domestic High Street banks. However, alternative and specialist lenders are now entering the market and aiming to fill the gap where mainstream banks have been pulling back.
This has been most notable in the commercial and development space, but now we are seeing lenders replicating the UK bridging finance model on a European scale.
At Interbridge Financial Group we have recently started cooperating with European banks to provide short-term loans on traditional residential investment property in some key hotspots around Europe.
We have been studying European property and funding markets for many years and noted that specialist lenders have not been able to obtain a foothold in other markets to the same extent as the UK.
This is because there are significant legal and regulatory barriers to entry, but we have also identified that local banks have reduced their risk appetites and increasingly moved towards tick-box property lending. There is now an exciting opportunity to move into this vacant space.
Property owners and investors are turning to alternative sources of financing to meet their needs on European property where the banks are proving to be particularly risk averse.
As such, we designed products that replicate the standard UK bridging product secured against second home and investment property in areas such as the French Riviera, Mallorca, Courchevel, Verbier, Paris and Munich.
This flexible offering will play a major role in Europe’s developing residential lending landscape
Non-bank lenders are increasing activity in real estate markets globally to finance deals and traditional banks are happy to step back amid many of the challenges which they are facing right now.
The new lenders are coming to the fore at a time of major dislocations such as the Ukraine war, equity bear markets and widening credit spreads providing the international residential investment market with much needed liquidity.
In the UK the short-term property finance market has grown to a USD10bn market niche and has attracted substantial amount of institutional funding.
As the market has matured, we are delighted to be at the forefront of taking the UK bridging market success story to Europe. We have a product that is clearly in demand and have ambitious plans to expand our footprint and offer Fintech solutions to customer journeys during the next phase of our development.
Europe’s specialist lending sector is changing, and whilst it is fledging in comparison to the UK market, there are clearly companies able to offer a unique product in a growing marketplace.
Interbridge are able to offer bridging loans in France, Monaco, Spain, Switzerland, Germany and Austria.
Sean Adams is chief commercial officer at Interbridge Financial Group
This article was originally posted in the Intermediary.
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