Slow-moving housing market driving bridging boom ‒ Henry Dannell

That’s according to specialist mortgage broker Henry Dannell, that said that the industry cannot deliver the desired pace of buyers and sellers. 

Analysis by the broker found that the total value of bridging loan lending in the UK has jumped by around 22 per cent in the last year, while between the first and second quarter total bridging loans grew to £178.4m, a jump of 13.8 per cent.

However, the broker pointed to the fact that completion timescales are growing, hitting an average of 57 days in order to get a sale across the line and contracts signed, which is 10 days longer than this time last year and six days longer than pre-pandemic.

Slower moves and higher demand drive bridging

Geoff Garrett, director of the firm, noted that while the market is moving more slowly than in recent years, buyer demand is extremely high and “activity is through the roof”.

He continued: “This causes delays in the conveyancing and buying process which, in turn, increases the need for bridging loans.

“However, with the cost of living and interest rates rising so rapidly, one has to expect to see a slight drop off in buyer demand and, therefore, a decline in bridge financing over the next year or so.”

Data previously released by the Association of Short Term Lenders found that the bridging loan applications, completions and loan books all grew sharply in the second quarter of this year, however defaults rose 31.5 per cent on the preceding quarter.