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Liquidising your assets: how a bridging loan could be the start of a happy retirement
There are many private investors in the UK who have taken advantage of previous lulls or dips in the housing market, inheritances or excess income to buy second or third properties cheaply. Rather than embark on great plans to build serious property portfolios, these investors see these additional properties as part of their retirement package or simply something set by for a rainy day, with a little more potential for growth than a savings account.
So what happens when that rainy day comes or when retirement approaches and you need to realise the equity in your buy-to-let or second home property quickly?
If your retirement fund is tied up in bricks and mortar, the first thing you’re going to have to deal with on receiving the carriage clock is selling your properties. For many people that involves downsizing to a more manageable dwelling for themselves and releasing the equity from their buy to let property to use for general day to day living.
In the current climate having to sell not just one but two or more properties at the same time in a reasonable time scale would be nothing short of miraculous - unless you’re prepared to take a substantially lower offer from a house-buying company. That could leave you with no real income and a long wait until you can free the money tied up in your properties.
One option might be to look at an equity release scheme although most people are usually wary of the complexity of these schemes and the rather poor terms they can offer. Far more preferential option is to arrange a bridging loan that can cover your expenses and allow you to move to a more affordable property while you sell your existing properties – once you have sold your property assets the loan can be paid off leaving you to enjoy the profits from your property sales during your long and happy retirement!
