Brokers attributed their uptick in activity primarily to homeowners downsizing and seeking to sell in the spring in anticipation for a further rate cut, or professional property investors purchasing properties put on the market by amateur landlords following the Autumn Budget.

Q3 2024 also saw a rise in bridging activity with the BDLA reporting a record rise in completions and overall loan books, while over the past year 19% of landlords across England and Wales sold properties, compared with the 8% who bought, according to research from Pegasus Insights.

“Bridging finance went ballistic in November — for us, this was primarily a result of people downsizing due to the ongoing cost of living crisis,” said Adam Stiles, managing director at Helix Financial Partners.

“They use bridging when they have found the perfect home but haven't yet sold their own home and don't want to lose the onward purchase,” he continued.

“The other profile of bridging borrowers we are seeing are professional property investors who are seeking alternatives to traditional BTL and are buying properties and converting them into HMOs.

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“HMOs not only add value but provide higher yields, something that's hard to achieve with conventional BTL nowadays.”

In the Autumn Budget in October, Rachel Reeves announced a rise from 3% to 5% stamp duty tax land tax (SDLT) for second homes with some industry professionals fearing it could lead to a raise in landlord exits.

Others also noted the impact the BTL market had on the bridging market, Graham Cox, director at Bridging Hub, said: “We're seeing a lot of demand for bridging loans at present. November has been exceptionally busy as many amateur landlords, following the Budget, exit the market.

“On top of steeply rising mortgage rates, and a less generous tax regime, the increase in the BTL stamp duty surcharge from three to five percent was the last straw for many.

“This is presenting huge opportunities for professional landlords, who are snapping up below market value rental properties from distressed sellers.

Graham also noted another factor adding to the increase, “Commercial to residential conversions under permitted development are also becoming increasingly popular.”

Kelsey Phillips, head of specialist lending at Arose Finance said that November had been “busier than ever” for bridging finance completing almost 25% of annual bridging volumes in November alone.

Kelsey attributed the rise with the Budget emboldening the demand for real yield, and consequently the appeal for HMOs.

“We're seeing existing clients scale and new entrants utilise bridging for the first time.

“Savvy investors are also continuing to capture market dislocations securing below-market-value purchases ahead of the SDLT threshold sunset [in] March next year — the UK market is rife with opportunity for the proactive property investor, including flipping.”