Bridging lending on the increase

Bridging lending on the increase

According to the latest West One Bridging Index the bridging industry has picked up over the last three months.

Quarterly gross lending grew by 14% to £399 from £348m in the second quarter of the year.

This represents a 65% increase from the same period last year.

The improvement has been put down to increased loan sizes with the average loan value now at £398,000 up from £368,000 in the previous quarter.

Duncan Kreeger, chairman of West One Loans said: “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.”

West One said that big banks were turning away borrowers who would normally be credit worthy.

The number of loans granted grew by 6% from last quarter, leaving loan volumes 18% higher than for the same period last year.

Mr Kreeger said: “The bridging industry is maturing and becoming an established sector in its own right.

“The days when bridging was seen as a last resort for desperate borrowers are a distant memory.

“It has become an indispensable source of finance for society. It is attracting more credit-worthy borrowers, who now see it as a legitimate alternative to high street finance.”

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