Recent analysis from specialist lender Octane Capital has revealed interesting trends in the bridging loan market that could have implications for Bury St Edmunds homeowners looking to sell, particularly those considering pre-sale improvements.
According to data from the EY Bridging Report analysed by Octane Capital, refurbishment remains the primary reason homeowners and investors seek bridging finance, though its popularity has declined in recent years:
● 33% of bridging loans in the past year were for refurbishment purposes
● This represents a decline from 35% the previous year and 50% in 2021
● Other common uses included auction purchases (19%) and mortgage delays (16%)
For homeowners in Bury St Edmunds considering selling, these bridging loan trends reveal important market dynamics:
The continued popularity of refurbishment-focused bridging loans indicates strong buyer interest in properties with improvement potential. Properties that offer scope for modernisation, extension or reconfiguration remain attractive to a segment of the market willing to take on projects.
Octane Capital predicts a reversal in the downward trend of refurbishment bridging loans in 2025, driven by an improving mortgage landscape. As Jonathan Samuels, CEO of Octane Capital, notes: "Whilst this popularity has reduced somewhat in recent years, bridging could come into its own in the coming months, as borrowing costs fall."
For sellers, this could mean increased competition from buyers seeking properties to renovate, particularly as bridging finance becomes more affordable.
A significant driver for refurbishment bridging loans going forward will be energy efficiency improvements:
● Labour has proposed that all privately rented homes must reach an Energy Performance Certificate (EPC) rating of C by 2030
● Rising energy costs have made efficiency improvements more financially beneficial
● Properties with poor energy ratings may see increased price negotiation from buyers
As Samuels explains: "Not only is there the 2030 deadline for improving EPCs to C, there is a strong case for lowering the cost of energy bills at a time when costs have skyrocketed."
The cost of bridging finance is expected to decrease throughout 2025:
● The Bank of England reduced the base rate from 4.75% to 4.5% in February 2024
● Two members of the Bank's Monetary Committee voted for a 0.50% rate cut, suggesting further reductions are likely
● Currently, a typical £200,000 refurbishment loan costs approximately £26,000 in interest and fees
As these costs fall, more buyers may be willing to consider properties requiring work, potentially widening your pool of potential purchasers.
If your property offers refurbishment potential, consider:
● Highlighting possible extension opportunities (subject to planning permission)
● Providing floor plans that show potential for reconfiguration
● Obtaining quotes for energy efficiency improvements to help buyers understand costs
When deciding which improvements to make before selling:
● Focus on addressing structural or significant maintenance issues
● Consider energy efficiency improvements with strong ROI
● Be cautious about extensive cosmetic renovations that may not align with buyer preferences
With changing market dynamics:
● Properties requiring significant work may attract investors leveraging bridging finance
● These buyers will factor in all renovation costs when making offers
● A realistic asking price that acknowledges necessary improvements will attract more interest
As interest rates continue their expected downward trajectory, the bridging loan market for refurbishments is likely to strengthen. For Bury St Edmunds homeowners planning to sell in the coming year, understanding these dynamics can help inform decisions about property improvements and marketing strategies.
Whether your property is in pristine condition or offers renovation potential, knowing how different buyers finance their purchases provides valuable context for positioning your home effectively in the market.
By considering these trends when preparing your property for sale, you can better align your approach with the financing options available to potential buyers, potentially widening your market appeal and improving your chances of a successful sale.
At Coakley & Theaker, we’re more than just estate agents, we’re your local property partners. With a wealth of experience and a passion for helping people find their ideal homes, we’re committed to delivering exceptional service every step of the way.
If you’re considering a move to Bury St Edmunds in 2025 or want expert advice on the local property market, contact us today. Call 01284 769691, or get in touch via our social media profiles to discuss your options.
Bury St Edmunds, Suffolk 01284 769691 or 01359 256821 or 01449 737706 or 07803 138123
Email: [email protected] or [email protected]
© 2016 Coakley & Theaker. All rights reserved. / Estate agent websites powered and hosted by 
