36% growth predicted for bridging lending

36% growth predicted for bridging lending




Reliance on alternative forms of finance, specifically bridging lending, will increase in 2013 in the wake of weak mortgage lending, according to a poll of financial intermediaries .

Reliance on alternative forms of finance, specifically bridging lending, will increase in 2013 in the wake of weak mortgage lending, according to a poll of financial intermediaries.

The news comes after the 
Council of Mortgage Lenders (CML) predicted that that banks and building societies would lend an extra £12 billion in 2013, 8.3 per cent more than they did in 2012, yet an intermediary survey conducted by lender West One Loans predicts a 36 per cent bridging growth over the next year.

Expected to grow four times faster than the mainstream mortgage market, the bridging industry has eclipsed the government’s Funding for Lending Scheme (FLS); alternative lenders are predicted to provide £511 million of funding while the initial impact of the FLS stands at just £496 million.

In addition, the surveyed brokers expect lower interest rates on bridging loans in 2013.

45 per cent of brokers now predict average rates to be lower in a year’s time – outnumbering those who predict higher rates by almost three times.

This leaves the proportion of intermediaries expecting lower rates more than double the level it was in February – when this proportion was 19.6 per cent of all brokers.

35 per cent of intermediaries also expect an increase in LTV ratios while only 14 per cent predicted that LTVs would be lower in 2013.

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