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TODAY'S OTHER NEWS

Bridging bursts through £3.5bn barrier

Gross bridging lending burst through the £3.5 billion barrier in 2015, against £2.42 billion last year.

This means the sector grew almost 44% last year, against just 8% in the mainstream mortgage market.

This equates to £13.9 million worth of transactions each working day, according to the latest West One Bridging Index.

Despite the growth, the bridging sector is still only worth approximately 1.5% of the traditional mortgage sector, which was valued at £220bn in 2015.

This suggests there is plenty of scope for further expansion.

The bridging sector grown due to flexible underwriting with specialist lenders considering cases on an individual basis and showing a greater appetite for lending on commercial projects than high street banks, West One said.

It said forthcoming regulation from the EU’s Mortgage Credit Directive (MCD) should lift growth as loans secured on an individual's home will be regulated by the Financial Conduct Authority, boosting demand from FCA-regulated brokers.

There is also a potential boost in demand for bridge-to-let finance before April’s impending stamp duty hike, to ensure buyers complete before the deadline.

Duncan Kreeger, director of West One Loans, said 2015 was a “brilliant year” with an explosion in demand for short-term finance.

“The sector ended the year on a high, breaking through the £3.5bn barrier, a welcome reward for all the hard work in our industry.

“This pace of growth looks set to continue into 2016, as we expect to pass the £4bn milestone in the not-too-distant future.

“Despite its growth, bridging remains a relatively alternative product, so there is still plenty of room for expansion, especially as new regulation drives future growth.”

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