As 2016 approaches, bridging lenders have revealed to B&C their predictions for the market next year.

Jonathan Sealey, Chief Executive of Hope Capital, felt that next year will see fewer new market entrants as lenders look to consolidate or increase their loan books by acquiring other bridging lenders or packagers.

“I also predict that a few of the newer more entrepreneurial entrants into the bridging market over the last five to six years (like Hope Capital) will really start pushing the so called ‘old boys’ of the industry hard for market share, with a plethora of new products that will further stimulate an already buoyant market,” Jonathan added.

Amicus is one firm looking to continue its remarkable growth into the new year after announcing plans to apply for a banking licence.

“We have plans in place to capitalise on last year’s acquisition of Preston-based Mayfair Bridging, and whilst investment in the North is very much yield based, the areas around Leeds, Manchester and Merseyside, I believe will be fertile in 2016,”Keith Aldridge of Amicus added.

“This year, we were the first lender to offer £100m fully funded short-term mortgage backed securitisation, we expect to repeat the exercise in 2016.

“Amicus has, through acquisition, quality recruitment and improved funding lines seen a growth anticipated to be over 60% for the year...If it is possible I have more optimism for 2016.”

Bob Sturges, Head of Communication at Omni Capital, said he expected lenders to express growth in a number of different ways including product innovation, pricing, fee structures and company re-brands.

Dragonfly, Mayfair Bridging, Blemain Group, and Capital Bridging all announced major rebrands in 2015.

“The sector will continue to be energised by the continuing demand for flexible, assured real estate funding,” said Bob.

As for the future growth in bridging lending, figures from the West One Loans Bridging Index revealed that short term lenders provided  £2.8bn of finance on an annual basis, and this was expected to reach £3bn by the end of 2015.

Narinder Khattoare, Sales Director at Alpha Bridging, said he saw no signs of the market slackening off in 2016, saying that demand was high.

“I would say that unless funding sources find a more lucrative home, the market will continue to grow,” said Narinder.

Jonathan, added: “I expect the market to continue in an upwards trajectory.

“It’s hard to quantify the various figures banded around within the industry, to define how big it currently is and how big it is expected to be, however Hope Capital has a very ambitious growth plan for 2016 and beyond.”

Ashley Ilsen of Regentsmead expressed slightly more caution, saying that the direction of the bridging market would be dependent on a number of wider factors.

“There may well be a market correction in the next few years, so I’m glad I’m not a betting man as I wouldn’t like to try and call it,” said Ashley.

“I think there is still room for growth, but this needs to be at levels that are sustainable.”

Despite Narinder’s confident prediction, he did question just how much leeway the bigger bridging lenders actually have.

“There has been a marked tendency from cases we have seen in the last half year, that suggest these lenders are becoming more cautious, are deliberately cherry picking or are seeing a hardening of the credit profile their investors are looking for,” Narinder said.

“We shall see.”

However, Keith believed that continued low rates and little movement in inflation would sustain a high confidence level in the market.

“At Amicus we are planning to repeat this year’s growth figures, and that will produce completions over £400m,” said Keith.

“A great deal of the growth will be driven by spin-offs from the government’s initiatives to attack the housing shortage and the bigger lenders will be watching the opportunities that developers will be benefiting from.”

Bob concluded: “The short-term real estate funding sector has never had so many devotees and participants as now.

“In certain niche areas there is more money available than transactions to consume it.

“I believe there is a definable and finite size to the sector.

“I don't know if we've reached it yet, but I do know it's unlikely ever to be big enough to accommodate profitably many more participants.”