Bridging loan lending has increased by 28% since the start of the COVID pandemic, according to new analysis from Revolution Brokers.

At the start of the pandemic, total bridging loan lending in the UK totalled £122.9m in Q1 2020.

The research by Revolution Brokers showed that as COVID then swept the country, quarterly totals plummeted significantly, falling as low as £79.4m in Q2 2020.

However, as the government started to introduce home buying incentives such as the stamp duty holiday, activity across the housing market accelerated, with bridge lending also increasing steadily. By Q1 2022, bridging loans totalled £156.8m, which is an increase of 28% on the total for Q1 2020.

Revolution Brokers suggested that as more people try to buy homes, chains get longer while professionals, such as agents and conveyancers, get busier – resulting in transactions taking longer to complete. This has seen more buyers in need of emergency, short-term loans to help them stay in the market while the transaction works itself out. 

“The government very intentionally made it hard for prospective buyers to resist getting involved with the property market during the pandemic,” said Revolution Brokers founding director, Almas Uddin.

“Significant tax breaks caused many to think it was an opportunity too good to refuse and so market activity boomed. It’s natural for this to result in more and more people needing short-term loans in order to stay afloat when processes get delayed. 

“But interest rates are on the rise and don’t look like they’re going to slow down any time soon. This means the already high rates associated with bridging loans are going to become even more expensive. Therefore, it’s vital that when looking at bridging finance, you get a comprehensive view of what’s available to suit your individual situation.”

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