Net lending 114% higher year-on-year

Net lending 114% higher year-on-year


Net lending in bridging has increased by 114 per cent year-on-year, according to data compiled by specialist short term lender West One Loans.

The increase has been driven by a significant surge in gross lending over the past 12 months. Net lending was also 24 per cent higher in Q1 2012 than in the last quarter of 2011.

The growth in new lending comfortably outpaced the growth in loan redemptions, which is indicative of lenders being willing to complete new loans immediately rather than being forced to wait until their existing loans redeem.

The data, part of the West One Bridging Index was analysed and compiled into a statistical model format capable of plotting industry trends.

The Chairman of West One Loans, Duncan Kreeger, said: “The pace of growth we’ve seen in net lending shows lenders are funding new loans more consistently than at this point last year. It is testament to the stronger credit performance of loan portfolios over the last couple of years.

“Increasingly, lenders aren’t waiting for loans to redeem before granting new ones. This is great news for brokers because it provides them with a more consistent flow of business.”

Duncan highlighted how sickly the main mortgage market now looks in comparison with bridging. He said, “Net mortgage lending has fallen by 90 per cent since 2007, and it is forecast to fall by over 50 per cent this year compared to 2011. High street lenders are being forced to scale back their lending – particularly to borrowers who need finance the most – because of their increasing funding costs.

“The major lenders have seen their funding costs soar by 40 per cent since February. Bridging lenders aren’t hostage to the same misfortune. They’ll be able to continue funding loans consistently, and at low rates. Because our funders invest directly with us, our funding model allows us to provide brokers with a steady stream of loans.”

Leave a comment