What Is A 180 Day Value In Bridging Finance?

Many Bridging Finance companies will only lend against the 180 Day Value of a property.

What this means is the value of a property, if they only had 180 days to advertise and sell the property. This value can often be 5 – 15% lower than the Open Market Value (OMV), depending on the type of property.

A bridging lender may also take into account whether the property is vacant possession or would have to be sold with a tenant in situ. This can effect both residential and commercial properties, either increasing or decreasing the value.

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Its important that you understand exactly what valuation type a bridging lender is using. This could effect the amount of money you can borrow against a given property.

Things That May Effect The 180 Day Value

How expensive the property is
Residential or Commercial
Tenant or Leaseholder in situ
Owner Occupied
Area
Demand For The Property Type
Economic Outlook

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Why The 180 Day Value Decides Your Actual Advance

On most bridging loans this is the figure the advance is calculated from. A lender quoting 75% is frequently quoting 75% of the 180 day value, not 75% of the open market value or of the price you are paying. Where the 180 day figure sits 10% below open market value, that 75% quietly becomes closer to 67% of the number you had in mind.

Ask any lender for the loan to value and the valuation basis together. On their own neither number tells you what you will receive. This single question is the most common reason a bridging case comes in short at the offer stage, and it is avoidable at enquiry.

Our bridging loan broker page covers how lenders size an advance, and for longer term borrowing our commercial mortgage broker page sets out the loan to value bands by property type.

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