Derek McPhail

Bridging in Scotland is booming

If a bridging barometer existed in Scotland, it would be going off the scale.

Bridging finance north of the border is booming, and a fair bit more on top.

This month is once again going to be our biggest yet in terms of loans completed and bridging has been one of the most significant contributors to our book.

It's not just us experiencing this, either. One bridging lender also recently announced that its customer base was becoming far more northern-centric and I know many others in the industry are seeing the same.

Reflecting this, in the past week alone we've completed on two bridges of £800,000 and £700,000; one in Aberdeen, the other in Glasgow. There are plenty more in the pipeline, too.

The bridging facilities we're arranging are across the board, with acquisition for development sites – specifically permitted development rights – at the top of the pecking order.

We have seen a huge amount of competition for prime development sites in the major regional hubs of Glasgow and Aberdeen — and, of course, the capital Edinburgh.

Scotland – like many other areas of the country – is benefiting from the exodus of investor capital away from London and the South East and many developers are using bridging, in one of its purest forms, to snap up sites before the competition does.

But it's not all big-value site acquisition bridges, either. We've also recently bridged a client whose self-build had failed to get the necessary building regulations in place in time to remortgage away on to the term lender they had lined up.

It was either a bridge or pay the existing lender's penalty rate, which was compounding at £600 a day. The bad winter weather had scuppered this particular borrower, but a bridging facility saved them from paying the jaw-dropping interest rate.

At the most fundamental level, it's fair to argue that the UK's entire property market is slowly, but surely, changing.

The latest Land Registry data published this week revealed that house price growth in Scotland in the 12 months to August was 4.1%, compared with just 2.9% in England.

This shift in fortunes of the North and South is a trend that's been forming for some time and is becoming more pronounced, and inevitable, by the day.

Since time immemorial, the value and growth rate gap between Scotland and England has been as significant as it was set in stone. But now, you sense, is the time for the Scottish property market to claw back a fair chunk of lost ground — and bridging will be at the heart of that value grab.


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