Take a look at the latest infographic to discover the general trends that shaped the UK bridging finance market during 2023

Key Points:

Interest rates rise to highest annual average since 2015

Preventing a chain break most popular use of a bridging loan

Annual demand for second charge lending hits record low

Director’s comments

Dale Jannels, Managing Director at impact Specialist Finance comments:

“It’s no surprise to see an overall increase in bridging volumes in 2023 and it reflects what we have seen at impact, especially the increased use of regulated bridging. As a business that’s been operating in bridging for decades, we recognise and understand the products’ complexities and have seen almost every kind of customer scenario. This helps identify potential issues before they arise and helps brokers and their customers use regulated bridging sensibly and with eyes wide open. I would strongly recommend that brokers seek the help of experts, who contribute to this index, as I don’t see demand for bridging diminishing, but increasing, and, inevitably, with more complexity.”

Matthew Dilks, Bridging & Commercial Specialist at Clever Lending comments:

“These figures come as no surprise and back up the year we’ve had at Clever Lending, which saw the number and variety of bridging cases we handled reach unprecedented levels. What’s encouraging has been the number of brokers who have used us for bridging for the first time and personally, it has been extremely rewarding to support them in delivering finance to support their customers’ requirements and needs.”

Andre Bartlett, Director at Capital B Property Finance comments:

“I am pleased to see the remarkable growth in the bridging loan market as evidenced by the latest Bridging Trends data. The record-breaking £831 million transacted in 2023 signifies a significant 16% increase from the previous year, demonstrating the increasing reliance on bridging finance within the property sector. It’s noteworthy how borrowers utilised the speed and flexibility of bridging loans to prevent chain breaks, especially amidst market uncertainties. Additionally, the rise in regulated bridging suggests a shift in borrower preferences influenced by evolving market dynamics, including rising interest rates and product withdrawals from traditional mortgage lenders. Despite these challenges, it’s encouraging to observe stable average loan-to-value levels.

“However, the decline in demand for second charge bridging loans highlights changing borrower priorities, potentially driven by a preference for property purchases over equity release. Overall, the data highlights the resilience and adaptability of the bridging finance market.”

Gareth Lewis, Managing Director at MT Finance comments:

“It is encouraging to see that bridging finance’s popularity is growing and that an increasing number of borrowers are unlocking its speed and flexibility. Brokers have clearly worked hard to educate their clients and that has certainly paid off. As a sense of stability returns to the mainstream mortgage market, my hope is that borrowers continue to utilise bridging’s versatility for everything from unlocking equity to funding an auction purchase and we move further away from the perception that it is solely a last resort option.”