UK bridging finance hits pre-Brexit high

UK BRIDGING lending rose to a pre-referendum high of £4.7bn in the third quarter, according to new research.

Bridging finance provider West One’s latest index, released on Tuesday, showed that gross annualised lending increased from £4.3bn in the second quarter to £4.7bn – exceeding 2016’s pre-EU referendum high of £4.4bn.

The index, which uses the company’s data as well as statistics published by the Association of Bridging Professionals and other UK bridging loan providers, also found that the emerging trend of smaller transaction sizes had continued into the third quarter.

Average loan sizes within the bridging finance sector dropped below £600,000, compared to averages above £900,000 at the same time last year.

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This reflects the relatively depressed market for high-end properties with values over £1m, particularly in London, West One said.

However, there has been a large volume of smaller transactions, meaning that total lending held up well in the third quarter as the figures show.

West One predicts a further rise in bridging rates in the fourth quarter, although the sector remains highly competitive.

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“The bridging sector has performed well during the third quarter, despite the backdrop of concern around the progress of Brexit negotiations, and economic indicators pointing to both a slower economy and to the interest rate rise that ultimately came in November,” said Danny Waters, chief executive of West One’s parent company Enra Group.

“Whatever happens next, the industry must continue to adapt to conditions, and provide the diverse and flexible funding options that property professionals need, so they can take advantage of the changing, regional landscape that we are seeing develop.”

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