Why it is so difficult to gauge the size of the bridging market

The panel, ‘Unlocking investment opportunities in bridge lending: understanding the asset class and market dynamics’, included panellists D’mitri Zaprzala, CEO at Avamore Capital; Sabinder Robinson-Sandhu, head of growth at Brickflow; Paul Munford, CEO at Century Capital; Emily Gestetner, CFO at Enra Specialist Finance;  Kevin Vanistendael, director at Barclays; and was mediated by Kandarp Rawal, managing director at SpecFin Capital.

Despite the bridging market becoming more mainstream, there was a consensus among some panel members that when gauging its progress, there were elements of bridging that were still difficult to measure.

One of these was the ‘grey area’ of working out the size of the industry. According to Sabinder, the wide spread of lenders made calculating the numbers a tough task.

“You've got major banks, challenger banks that are well established, right through to very small, privately funded outfits that are perhaps deploying a couple of loans per year,” she said.

“From a data perspective, it's very hard to know how many bridge lenders specifically sit in the space.”

Sabinder also noted the diverse range of definitions for bridging finance varying from lender to lender, which added another layer of complexity when trying to gauge the size of the industry. “You’re never really comparing apples with apples.”

While some data is gathered, notably from the BDLA — which has supplied figures on the health and growth of the industry  — Sabinder said that the true numbers are still difficult to pin down.

“You see massive swings in the data because, from each collection point, you either have big hitters coming into the space and participating with that collection, or you have simply one person answering the questionnaire one month and another answering it the next,” she claimed.

Emily agreed that while data such as that supplied by the BDLA was a good indicator of the growth and health of the industry, comparisons could be difficult.
According to the latest figures from the BDLA, bridging loan books grew to record levels in Q2 2024, reaching almost £8.4bn.

However, Emily noted that most of that growth had been in residential, particularly regulated residential.

She caveated that while BDLA data reported that around 40% of loans can be regulated, this may be skewed due to many members being specialist banks. 
“That’s not my own experience. We probably see more like one-quarter,” she said.

“One of the reasons regulated loans have increased so much is that there were a couple of relatively large players who became members in [the] early 2020s, so it's really difficult to know what it's telling you if you don't have data on a comparable basis.”

On the topic of regulation, D’mitri offered a word of caution for lenders: “If you're in doubt whether it may be regulated, it would be to err on the side of caution, because it's a very binary outcome if you've written what is clearly a regulated loan on an unregulated basis.

“I have seen this years ago where an unregulated broker will try and force through a loan on an unregulated basis simply because they didn't have the correct permissions. So, tread carefully is what I would say.”

Emily agreed: “We see a lot of loans where lenders don't necessarily know (because a lot of bridging lenders aren't regulated), what is a regulated loan and what isn’t.”

Pictured left to right: Kandarp Rawal, D’mitri Zaprzala, Emily Gestetner, Paul Munford, Sabinder Robinson-Sandhu, Kevin Vanistendael