Bridging loan use by property investors rises again
Short-term bridging loan finance is at a new all time high, according to new data published by short-term secured finance providers, West One loans.
Annual lending of £778 Million (GBP) meant that short-term second charge lending by consumers reached a new record high over the last year.
At the start of 2013 the gross amount of bridging finance being borrowed was recorded at £549 Million (GBP) and an increase of 42% in business saw an additional £229 Million (GBP) in gross short-term secured lending being sought by property investors in the twelve month period to 2013 in order to reach the new high. Businesses are expanding, and want to capitalize on opportunities with fast and flexible finance, so bridging loans have been increasingly used. Property investors and property developers have also made good use of short term finance over the last two years due to the difficulties associated with getting an acceptable buy-to-let mortgage, with lending rising by 124% over the last 24 months, more than doubling the £357 Million (GBP) gross lending recorded in the year ending January 2012.
CEO of West One Loans, Mark Abrahams, said: “As we shed the gloom that has hung over the UK for far too many years, opportunities to invest are becoming more competitive. In many areas this is starting to inch up the cost of capital. But a new appetite for the most immediate and lucrative projects is still opening up new markets and partnerships for UK lenders. Meanwhile investors are hungry for new opportunities. They want to be involved in tangible projects that add serious value. The best lenders are making those connections with credit-worthy opportunities in business and property in the UK.”
The UK’s property market is a prime example of the escalating demand for short-term finance and at present consumer confidence is driving forward the surge in business, which is good news for the wider economy as it stimulates spending power.
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