Bridging Loan market tops £1bn for the first time

Statistics released by one of the main Bridging Loan lenders in the UK have revealed that this market continues to grow and from March 2011-March 2012 it is estimated that total gross lending was at £1.1bn, breaking the £1bn barrier for the first time. The trend is set to continue as forecasts now have lending being in excess of £1.5bn for the 2012 calendar year. Other statistics were also quite telling: the average size of a bridging loan has increased by 20% over the last 12 months to an average now of just over £400,000; the average LTV has also risen in the past year from 47% to 49.3%  and anecdotally the report suggested that rates were dropping too (a fact we can confirm since we introduced our market-beating 0.85% rate last month). It all points to an industry in rude health showing strong growth potential. But what has caused this surge in Bridging lending? From our side we would suggest that the combination of a strong Buy to Let investment market - especially in central London where many of the Bridging Loan companies are based - and the withdrawal of credit from the market by the HIgh Street banks have created a perfect environment for private Bridging loan companies to thrive. Our customers are always surprised that their loans don't come from a Barclays, NatWest or HSBC but rather from a raft of names that are lesser known to the public such as Cheval, Masthaven or Dragonfly. Indeed more recently we have also been able to finance bridging deals using a panel of private investors we can turn to who are also keen to earn a better return on their money than conventional investments provide but with the security of a strong LTV covenant behind it. These accidental bridging finance providers have all been part of the story that have driven the Bridging Loan market to its current highs. The future in the medium term continues to look bright. With bank funding remaining an issue, the market looks set to grow from both a supply and demand side. The demand will continue to come from property investors who benefit from higher rents due to the fact more people are renting because they can't get mortgages and the supply side also looks set to remain robust as investors will be happy to take an enhanced return for a relatively secure form of investment. Choice Loans is an independent Bridging Finance broker. We speak to all the major and several private/niche bridging finance suppliers. We can fund you within 48 hours though usually it tales a week or so, with rates starting at 0.85% pm (subject to LTV). To progress an application either compete the form on our Bridging Loan page here or call us on 0845 126 0350