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Bridging lending slightly down as loan size hits highest level since Q1 2017 – West One

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  • 10/06/2019
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Bridging lending slightly down as loan size hits highest level since Q1 2017 – West One
Gross annual bridging lending reached £5.5bn in the twelve months to Q1 2019, slightly down from the previous quarter when it stood at £5.7bn, according to the West One Bridging Index.

 

Despite this modest fall, average loan size increased by 11 per cent, hitting its highest level since Q1 2017.

With a relatively static property transaction market and house prices showing minimal growth, property developers are increasingly keen to hold out for the ‘right’ price, the lender said.

To aid this, bridging lenders are creating new development exit loans to help builders transition from repaying their development facility, to obtaining the sales value they want to achieve.

The report also found an increasing demand from borrowers for bridge-to-let products. Savvy landlords are looking for other ways to achieve high returns in the face of tax relief changes and affordability stress tests.

Landlords and developers are seeking out distressed and derelict properties that are in need of repair and, using bridge-to-let, bringing them up to standard and adding them to their rental portfolio.

Bridging finance interest rates have fallen to among their lowest levels, with a Q1 average of 0.95 per cent a month.

 

Upward trajectory

Stephen Wasserman, managing director of West One Loans (pictured), said: “It is positive to see the average loan size increase. With the Association of Short Term Lenders (ASTL) reporting a record number of applications among its membership, it’s clear that bridging finance is still very much on an upward trajectory.”

“At West One, we’ve seen robust growth in our bridging service this year, which includes completing one of our largest loans.

“We provided a £20m first charge bridging facility against a high value site in a prime London location. We were able to complete the deal in just 18 working days — thanks to the quality of the deal, our ongoing relationship with the client and the slick service of our premier loan team.”

 

 

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