According to Revolution Brokers, in Q1 2020, the start of the pandemic, bridging loan lending was pegged at £122.9m.
The numbers were collated from the Bridging Trend report, as well as Homeowners Alliance, Which? and Money.
Initially during the pandemic this fell, going to £79.4m in Q2 2002 and then recovered finishing the year at £137.2m.
Throughout 2021, bridging volumes continued to grow and reached a high of £190.2m in Q3 2021 and has since fallen slightly to £145.4m and £156.8m over Q4 2021 and Q1 2022 respectively.
Gross lending is still slightly below pre-pandemic figures, with gross lending in Q1 2019 coming to £185.3m.
Revolution Brokers said bridging loans volumes had been rising since the start of the pandemic due to the busy housing market, as more people tried to buy homes, chains got longer and completion times extended making sales more precarious.
This led borrowers to take out short-term bridging loans to help them stay in the market whilst the transaction bore out.
Founding director of Revolution Brokers, Almas Uddin, said the government “intentionally made it hard for prospective buyers to resist getting involved with the property market during the pandemic”.
He said that “significant tax breaks” on things like stamp duty led many to think it was an “opportunity too good to refuse and so market activity boomed”.
“It’s natural for this to result in more and more people needing short-term loans in order to stay afloat when processes get delayed,” he added.
Uddin noted that interest rates were rising and didn’t look like they would slow down any time soon, so bridging rates were going to become more expensive.
“Therefore, it’s vital that when looking at bridging finance, you get a comprehensive view of what’s available to suit your individual situation,” he explained.
