Contributors transacted a record breaking £278.8m of bridging loans during the period, a 30% uptick on the previous record of £214.7m in Q3 2022.

The report highlighted that the number of residential homeowners turning to bridging finance to prevent chain breaks rose from 15% in Q4 2022 to 25% in Q1 of 2023, due to uncertainty around rising interest rates and risk appetite in the market.

Regulated bridging demand also rose from 43.8% in Q4 2022 to 46.2% in Q1 2023 — the highest since Q1 2021 — while monthly interest rates remained steady at 0.79%, due to the instability felt by lenders and the mortgage market.

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Despite this, demand for bridging loans from investors and landlords to purchase investment  assets decreased from 26% in Q4 2022 to 15% in Q1 2023, as did the average LTV from 57.9% to 54.7%.

Second-charge bridging demand also fell from 12.9% to 11.2%, while the average completion time dropped to 54 days, down from 66 in Q4.

Andre Bartlett, director at Capital B Property Finance, said: “We’ve certainly seen an increase in regulated bridging requests from clients looking to downsize or chain break, so they can choose when to sell their property and not panic while the market reacted to the changes in the economy.

“More clients are realising bridging loans can unlock equity and put them as the best purchaser on a new property if used correctly.

“With the slight slowdown in the property market, it is good to see that processes are getting quicker and returning to the way bridging loans should be.”