The value of the bridging loan industry has broken the £1bn barrier for
the first time, driven by buy-to-let investors unable to get funding
elsewhere.
West One’s latest quarterly bridging index found that gross lending in the 12 months from March 2011 to March 2012 rose sharply to reach £1.1bn, 21 % higher than in the 12-month period from January 2011 to January 2012.
West One, itself a bridging lender, says the increase is being driven by residential property investors.
With funding costs soaring on the high street, and banks and building societies scaling back their lending, it says that more investors have turned to bridging loans to fund their projects. Bridging lenders are plugging the funding gap left by high-street lenders.
Gross lending in the first quarter of 2012 was £382m, 95% higher than in the first quarter of 2011, and 30% higher than the previous quarter. If the pace of growth continues on its current trajectory, gross lending in 2012 will hit £1.5bn, an increase of 68% from 2011.
The number of loans advanced in Q1 2012 was 74% higher than during the same period last year.
The average loan size rose sharply from £342,000 in the first quarter of 2011 to £412,000 in Q1 2012, an increase of over 20%. This, says West One, reflects the bigger projects being tackled by property investors.
Duncan Kreeger, chairman of West One Loans, said: “A big funding gap has been created by the problems high street lenders are having with increasing funding costs, increasing capital requirements and heavy exposure to toxic assets.
“As a result, the high street simply can’t cater for the high demand from property investors for residential loans.
“Thankfully for property investors, bridging lenders are stepping in to fill the funding gap.”
He added: “But it’s not just investors who can’t get finance on the high street that use bridging loans. We’ve seen plenty of evidence of investors using bridging loans even when they can access a buy-to-let mortgage on the high street.
“This may be just the start of a more pronounced shift in the way property investors choose to fund their projects. The figures back up that view: with gross lending set to reach over £1.5bn by the end of this year, the bridging is growing at a rapid pace. Property investors see bridging loans as an increasingly legitimate option.”
West One’s latest quarterly bridging index found that gross lending in the 12 months from March 2011 to March 2012 rose sharply to reach £1.1bn, 21 % higher than in the 12-month period from January 2011 to January 2012.
West One, itself a bridging lender, says the increase is being driven by residential property investors.
With funding costs soaring on the high street, and banks and building societies scaling back their lending, it says that more investors have turned to bridging loans to fund their projects. Bridging lenders are plugging the funding gap left by high-street lenders.
Gross lending in the first quarter of 2012 was £382m, 95% higher than in the first quarter of 2011, and 30% higher than the previous quarter. If the pace of growth continues on its current trajectory, gross lending in 2012 will hit £1.5bn, an increase of 68% from 2011.
The number of loans advanced in Q1 2012 was 74% higher than during the same period last year.
The average loan size rose sharply from £342,000 in the first quarter of 2011 to £412,000 in Q1 2012, an increase of over 20%. This, says West One, reflects the bigger projects being tackled by property investors.
Duncan Kreeger, chairman of West One Loans, said: “A big funding gap has been created by the problems high street lenders are having with increasing funding costs, increasing capital requirements and heavy exposure to toxic assets.
“As a result, the high street simply can’t cater for the high demand from property investors for residential loans.
“Thankfully for property investors, bridging lenders are stepping in to fill the funding gap.”
He added: “But it’s not just investors who can’t get finance on the high street that use bridging loans. We’ve seen plenty of evidence of investors using bridging loans even when they can access a buy-to-let mortgage on the high street.
“This may be just the start of a more pronounced shift in the way property investors choose to fund their projects. The figures back up that view: with gross lending set to reach over £1.5bn by the end of this year, the bridging is growing at a rapid pace. Property investors see bridging loans as an increasingly legitimate option.”
View news source : http://www.introducertoday.co.uk/news_features/bridging-loan-industry-now-worth-E2A31bn
No comments:
Post a Comment