Bridging lending breaks £3.5bn barrier

Gross annual bridging lending has broken through the £3.5bn barrier in 2015, according to the latest West One Bridging Index.

Related topics:  Specialist Lending
Rozi Jones
3rd March 2016
Duncan Kreeger West One Loans

The growth has been attributed partly to a significant growth in the number of properties sold at auction, which has risen by approximately £800m.

The incoming MCD should also help lift future growth, according to West One. As more bridging products become regulated, the sector’s reputation is expected to be enhanced, with more demand from FCA-regulated brokers.
 
The demand for bridge-to-let finance before April’s impending Stamp Duty hike is also expected to fuel further growth in 2016.

West One expects the sector to pass the £4bn milestone in 'the not-too-distant future'.

Duncan Kreeger, director of West One Loans, commented:

“2015 was a brilliant year for the bridging sector, with an explosion in demand for short-term finance. The sector ended the year on a high, breaking through the £3.5bn barrier, a welcome reward for all the hard work in our industry. This pace of growth looks set to continue into 2016, as we expect to pass the £4bn milestone in the not-too-distant future. Despite its growth, bridging remains a relatively alternative product, so there is still plenty of room for expansion, especially as new regulation drives future growth.  
 
“Bridging is known for its speed, so it follows that short-term finance is easily outpacing the mainstream mortgage market. Bridging lenders are flourishing with an enhanced reputation for providing an excellent service. Borrowers are turning to short-term finance because it offers much faster time to completion than high-street lenders. As bridging loans have no minimum term and no exit fees, the flexibility is particularly appealing to some borrows. Commercial developers have turned to bridging, as bridging’s emphasis on security means that the sector will provide loans when traditional banks are reluctant. As the demand for fast finance looks set to rocket, an increasing number of borrowers will turn to bridging in 2016. Brokers who have previously never considered short-term finance for their clients are finding it increasingly harder to ignore.”

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