It isn’t only Santa’s elves that are busy at this time of year. The United Trust Bank Bridging Department is currently doing a passable impression of North Pole Central as we deal with an upsurge of cases, most of which are looking to complete before the end of the year, which really means by Christmas.
The Christmas period always used to be a busy time for specialist bridging lenders, but for the past few years the rush seemed to have been consigned to the historical scrap heap.
So why are we so busy and what is the reason for the upsurge in urgent cases requiring completion before the year’s end? The reasons for the general increase this year in activity in short term lending has been much discussed, being down principally to ever greater numbers of quality applicants being squeezed out of “mainstream” lending as the larger lenders retrench lending volumes.
However, I am more interested in why there is this rush to complete loans before the end of the year. On one analysis you would be forgiven for thinking that lending activity would decline at this time of year. Along with the short days and colder weather that saps most people’s energy, there is a general obsession with the Christmas holidays involving people taking time off, not working harder.
Although there are of course cases where loans need to be completed before the end of the year, because for instance it coincides with the financial year end, I think that the real reason behind the Christmas rush is psychological; there is a deep rooted sense of ending for ending’s sake, a feeling that somehow if a transaction is not completed before the end of the year then it never will be.
And although it can feel that way, the fact is that solicitors and valuers who are instrumental in all transactions, as well as the bridging lenders, will usually be back at their desk as early as 3nd January. In fact there are always cases that fail for one reason or another to complete before the New Year deadline and we find that not only did the world not end on New Year’s Eve, but those transactions give a nice boost to January’s completion figures!