West One

Bridging sector reaches £5bn landmark

Gross annual bridging lending surpassed £5bn by the end of 2017, according to new research.

The West One Bridging Index reported that a strong finish to 2017 saw the bridging sector hit a new high with gross annualised lending growing 24% on 2016.

Marie Grundy, sales director at West One (pictured above), said the bridging industry had shrugged off the headwinds buffeting other parts of the industry to deliver a record 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 benefiting from urban regeneration and moves away from London, like the BBC made a few years ago.”

The index found that the average bridging loan sizes remained between £600,000 and £800,000.

Meanwhile, bridging interest rates in Q4 2017 remained stable at 1% per month, despite the Bank of England base rate rise during November.

West One put the stable rates down to healthy competition within the market, which the lender pointed out had seen continued interest from new entrants.

“While a few lenders have notably taken 2017 as the time to exit bridging, we are generally seeing more competition in the sector, which both drives innovation and keeps pricing attractive for customers,” added Danny Waters, CEO at Enra Group.

“That continuing adaptation to conditions and to borrowers’ needs has been a key strength for the sector in the decade since the financial crisis.”

Looking to the future, Marie added: “…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 while planning permission is being obtained, bridging is well placed to support them.”

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