Allica Bank has announced an expansion of its residential Automated Valuation Model (AVM) bridging proposition, significantly impacting the mortgage market. The bank has raised the maximum loan-to-value (LTV) ratio from 70% to 75% and increased the maximum loan size for AVM products from £750,000 to £2 million. This change allows for greater flexibility in financing larger residential bridging cases.
What are the new features of Allica Bank’s AVM bridging loans?
The recent changes include not only a higher maximum LTV but also the option for below-market-value purchases at up to 90% of the purchase price. Additionally, title indemnity insurance is now offered as a standard alternative to full legal work, streamlining the process for borrowers.
Who benefits from these changes?
This expansion primarily benefits landlords, property investors, and brokers seeking larger bridging finance options. With the increased loan size and LTV, borrowers can access more substantial funds, making it easier to secure properties that may have previously been out of reach.
What this means for the mortgage market
The enhancements to Allica Bank’s AVM bridging loans could stimulate activity in the mortgage market, particularly for residential properties. By allowing higher LTVs and larger loan amounts, the bank aims to attract more clients and support growth in the sector. Brokers should watch for increased demand as these new terms may encourage more borrowers to consider bridging finance for their property needs. For the latest trends, check out our current mortgage rates.
Frequently asked questions
What is an AVM bridging loan?
An AVM bridging loan uses automated valuation models to assess property value quickly, allowing for faster loan processing compared to traditional methods.
How does title indemnity insurance work?
Title indemnity insurance protects lenders and borrowers against potential issues with property title, providing a safeguard when full legal work is not completed.