In the UK property market, buyers often face a timing challenge: they want to buy their next home before the sale of their current one is complete. This creates a funding gap between transactions. The solution is not a standard mortgage, but a short-term finance product designed to cover this gap — most commonly a bridging loan.
In London, where property chains often break and competition is fierce, this form of gap funding ensures buyers can secure their next property without losing out.
A gap mortgage — often structured as bridging finance — allows buyers to:
Access Funds Quickly – Typically available in days rather than weeks.
Secure a New Home – Even if the sale of their current property is delayed.
Repay Once the Sale Completes – Using sale proceeds or a long-term mortgage refinance.
Key Features:
Loan Term: 3–12 months (sometimes up to 24 months).
Security: Usually secured against your current home, your new purchase, or both.
Costs: Monthly interest rates from 0.4% to 1.2%, plus arrangement fees (1–2%).
Exit Strategy: Must be clear (property sale or refinance).
Chain Breaks – Preventing a purchase from collapsing when another buyer or seller drops out.
Upsizing or Downsizing – Buying before you sell, to avoid rushed decisions.
New-Build Deadlines – Completing on time when developers impose fixed dates.
Relocation – Securing a property for work or education before your current sale completes.
Protects Your Purchase – Ensures you don’t lose your chosen property.
Flexibility – Works for residential homes, buy-to-let, or mixed-use property.
Speed – Much faster than traditional mortgages, often completed in under two weeks.
Higher Costs – More expensive than standard mortgages.
Short-Term Only – Not suitable for long-term finance.
Exit Risk – If your sale is delayed significantly, you may face rollover costs.
Fraser Bond provides expert support for London buyers and investors seeking mortgages or bridging finance to cover house purchase gaps:
Independent Advice – Assessing bridging loans, let-to-buy mortgages, and alternative funding.
Trusted Lender Access – Connecting clients with competitive short-term finance providers.
Application Packaging – Preparing your case for fast approvals.
Exit Strategy Planning – Ensuring repayment through sale or mortgage refinance.
Compliance Support – Handling regulated bridging loans when secured on a primary residence.
To explore mortgage and bridging finance options that cover property purchase gaps, visit FraserBond.com.
