Robust bridging market reaches £2.8bn annual lending mark

Gross bridging lending increased by 27% in the 12 months to the end of August, according to the latest West One Loans Bridging Index.

It shows that short term lenders are now providing nearly £2.9bn of finance on an annual basis, up from £2.2bn in August 2014, and £2.8bn in the 12 months to the end of June 2015.

West One says the bridging market’s annual gain, boosted by borrowers capitalising on record low rates, dwarfs the growth seen in mortgage lending, which has risen just 2% annually over the last year.

Duncan Kreeger, Director of West One Loans, said: “While the mortgage market has witnessed year-on-year growth, the rate of improvement is negligible and significantly behind the bridging lending market.

“The mainstream home loan sector is also hostage to more monthly volatility than the short-term finance market, as evidenced by the 9% dip the Council of Mortgage Lenders reported in August.
 
“Bridging lenders and brokers have defied any suggestions of a seasonal slowdown and have worked hard throughout the summer to complete deals, with this stellar service and competitive interest rates helping maintain the attractiveness of bridging lending as a short term finance solution.”

Although West One revealed that loan volumes has slipped back from the highs seen in April and May, it said they remain on their overall upward trajectory thanks to a 12.2% annual improvement.

It also said that the average bridging loan is now worth more than £780,000, a 48% increase on the £526,000 seen last year.

Duncan added: “With the economic recovery ongoing, borrowers are becoming increasingly confident in the capacity of short terms lenders to meet their requirements, and feel increasingly comfortable using bridging loans for large projects.
 
“But bridging lenders are equally adept at handling smaller requests for finance as they are larger loans and will always assess each case on its individual merits.

“One of the fundamentals underpinning the bridging sector’s success is this adaptability and flexibility.”