Bridging loan industry grows 14% in third quarter

Tuesday, 30th October, 2012

The bridging loan market rose 14 per cent, from £348m in the second quarter to £399m in the third quarter, according to West One Loans’s latest Quarterly Bridging Index.

The bridging market is now predicted to hit £1.5bn by the end of 2012, in the wake of larger loans and higher volumes, says the lender.

West One Loans chairman Duncan Kreeger says: “Pain for the big high street lenders has been gain for bridging lenders. The recovery in the main mortgage market has been nipped firmly in the bud by renewed uncertainty. Funding from the money markets has become 45% more expensive since February – and higher capital adequacy requirements mean more business will be coming the way of the bridging market. Mainstream lenders are also being squeezed by the lack of confidence the money markets still have in even some of the largest banks.

“The big banks are turning away borrowers who, in a normal market, would be credit worthy. Credit scoring is tight, and plenty of affordable mortgages are advertised as widely available, when in fact borrowers have to cross a high threshold to be able to access them.”

The average loan size rose from £368,000 in the second quarter to £398,000 in the third. Average loan amounts still remain well below March peak level of £479,000.

Average rates dropped from 1.43% in the second quarter to 1.31% in the third quarter. Over the same period of time, LTVs fell from 48% to 46%.

Complete Mortgages has an in-house bridging and commercial specialist (predominantly covering the Surrey and London area but deals have been done all over the UK) therefore we are fully equipped to deal with any enquiries of this nature. Please contact us on 01483 233014 for a consultation.