Brokers predict 45% bridging growth, reports West One Loans

Brokers predict 45% bridging growth, reports West One Loans


Brokers are expecting 45 per cent more bridging business on average over the next 12 months, West One Loans’ most recent Broker Sentiment Survey has discovered.

93 per cent of brokers have also reported a recent increase in their levels of commercial bridging lending.


The rate of growth within business lending, too, appears to have accelerated more than other sectors of the market:  compared with 54 per cent of brokers reporting growth in February, 82 per cent now report increased activity in the market. 


As a result of such changes within the industry, professional landlords now make up 25 per cent of business conducted, with their amateur counterparts responsible for 13 per cent. Owner-occupiers, meanwhile, account for 18 per cent, whilst business loans and developer loans account for 18 and 25 per cent of business respectively.


There is a clear optimism amongst those that West One Loans surveyed, with 71 per cent predicting that their own bridging activity will grow over the next year, with those expecting for business to continue as usual account for 26 per cent and those fearing a loss of business at only 3 per cent.


Twice as many brokers imagined that product rates would go

down as those that expected rates to increase, and while 18 per cent foresaw a rise in rates 39 per cent expected a reduction.


Those questioned also predicted that lenders would increase their product LTVs: 25 per cent expected an increase compared with 13 per cent who imagined a reduction. 62 per cent, however, imagined that there would be no change, and LTVs would continue to competitive as they are.


Duncan Kreeger, Chairman of West One Loans, said: “Bridging looks set to expand steadily into 2013. A mild slowdown in the last quarter, as seen in our West One Bridging Index, indicated a moderation in the rate of growth. But these figures suggest a longer term pattern of consolidation. Brokers think bridging still has a long way to go, and this comes as traditional lending models have stumbled once again in August.”


Duncan added: “Brokers appear to agree with the conclusions we drew from the latest West One Bridging Index. Rates have risen from low levels at the beginning of 2012, but this increase is not expected to become a long-term trend. Equally, any indication that LTVs will rise means that the fall we recorded in the last quarter does not represent the start of any major upheaval. 


“What is encouraging is that brokers aren’t forecasting any sort of major correction – either in product rates or credit availability. Such gradual changes are consistent with the increasing stability and maturity of the bridging market. Our early indications for September support this.”


Duncan then said: “The government is keen to stress the importance of increasing business lending, but can’t put its finger on where the money should come from. While the economy has shrunk, the number of small businesses has boomed – according to BIS, 60% of private sector jobs now come from SMEs. 


“More bridgers are lending to people who can demonstrate a real business case but are shunned by restrictive practices at high street banks. In May, Lord Young’s report identified peer-to-peer and asset-backed finance as possible sources of business funding. He hit the nail on the head.”



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