Bridging lending reaches record high £5bn in 2017

Written by Oliver Wade

The UK’s bridging sector ended in a strong position in 2017 with a particularly powerful performance in Q4, yielding a new high of £5bn, according to West One’s Bridging Index.

The report revealed gross annualised lending continued its upward trajectory from £4.7bn in Q3 2017, growing a further 6% in Q4, which resulted in a 24% increase compared to the same period in 2016.

The findings further illustrated that, despite the first interest rate rise in 10 years, the bridging sector experienced a robust 2017 with ASTL members lending over £1bn in the quarter that the BoE implemented the 0.25% increase in its base rate.

West One sales director Marie Grundy said: “In 2017, bridging has turned out to be a ray of sunshine in the property finance world, with a series of record performances throughout the year. The industry shrugged off the headwinds buffeting other parts of the industry, to deliver a final lending total of £5bn for the year. At West One, our short-term lending grew with similar strength to a book of around £450m and record volumes of transactions in the year.

“What’s perhaps most encouraging is to see a breakthrough in the diversity of that growth, with more and more opportunities being found regionally. Where I am, in the North West of England, places like Greater Manchester and Merseyside are increasingly vibrant cities that are benefitting from urban regeneration and moves away from London, like the BBC made a few years ago. That means that these, along with Birmingham and the East Midlands that are extended commutes from London, are attractive places to live. Opportunistic investors looking for better returns are finding them here, and bridging is well placed to help them capitalise on those.

“Looking ahead, we remain confident in further growth of the bridging market not only through further regional expansion, but also as SME developers seek small project funding for housebuilding, to meet the government’s new home targets. With many finding it hard to get funding for projects under £1m, or to finance property acquisition whilst planning permission is being obtained, bridging is well-placed to support them.”

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