Bridging applications of £8.6 billion were submitted in Q4

According to Apex Bridging, bridging loan completions totaled about £5 billion in 2022, an increase of 17.6% annually.

One expert claimed that the flexible source of short term money has been essential in helping many people reach their goals during a challenging financial moment as the need for bridging is on the rise.

The findings from Apex Bridging, according to Vic Jannels (pictured), CEO of the Association of Short-Term Lenders (ASTL), reflect the organization’s own data.

With £8.6 billion in applications registered over the time, Jannels added, “our data shows that bridging applications continued to rise in the fourth quarter of 2022.”

Optimistic outlook

Overall, bridging completions rose by 15.5% over 2021 in 2022, according to Jannels, and bridging loan books rose by 28.9% over the same time, hitting a new high of just over £6.5 billion.

In fact, as more brokers realise the advantages of obtaining short-term financing to assist their customers in achieving their long-term goals, the demand for bridging finance has consistently increased over the past few years, according to Jannels.

When interest rates in the mainstream market were rising seemingly every day last autumn, one notable trend, according to Jannels, was that rates in the bridging sector were largely unaffected.

Even while there were rises, according to Jannels, bridging appeared to be mostly shielded from the more significant changes that were so pervasive throughout the larger market, which he noted made bridging even more competitive.

Main justifications for bridging loans

According to Jannels, bridging offered clients who needed transitional funds a flexible source of capital in the short term to aid them in achieving their longer-term goals.

“Some examples of this may be that they are refurbishing a property, converting a property using permitted development rights (PDR), or perhaps they are using the time and money to address the length of the remaining lease on a flat that might otherwise be considered unmortgageable,” he continued.

Jannels suggested that for homemovers, it might simply be the case that they were in a situation where they needed to finish the home to which they wished to move before the money from the sale of their current property was released.

According to Jannels, this strategy is especially popular with clients who are downsizing their homes. He also said that as mortgage rates have risen, more homeowners have been persuaded to make the step to downsize even though they may have previously rejected it.

2023 Expectations

According to Jannels, more brokers are becoming aware of the advantages short-term transitional financing can provide for their clients every day.

“We continue to see growing demand for bridging lending, and the lender environment remains highly competitive,” the speaker stated.

According to Jannels, the fact that bridging supplied crucial cash during a period of transition in a customer’s circumstances meant that it was a good source of funding for many home movers and property investors during this difficult time.

He anticipated that the bridging industry would continue to have consistent and sustained expansion in spite of the fact that the overall market was decreasing.

Last but not least, Jannels said, “it was imperative to create a clear exit route to pull down the bridge within the stipulated timeline for the benefit of all participants in the process.