Bridging
More homebuyers using bridging loans to overcome chain breaks
In an unsettled market, bridging lending has risen both quaterly and annually, according to the latest research by specialist bridging lender Apex Bridging.
The latest market analysis by the bridging finance specialists, Apex Bridging, which uses data from MT Finance’s Bridging Trends report, reveals that £214.7m was lent via the bridging sector in the third quarter of 2022, up 20.3 per cent on the previous quarter and 12.9 per cent more compared to the same period the previous year.
The ability to overcome a chain break when buying was the primary reason for homebuyers to switch to bridging loans. Indeed, bridging loans due to chain breaks have also seen the largest annual increase, up nine per cent up on the same quarter last year.
Those using bridging loans for business purposes, auction purchase and unregulated finance have further driven the uplift in activity on a quarterly basis, up five per cent, three per cent and two percent respectively.
Record bridging lending for 2022 estimated
In terms of total lending for 2022, Apex Bridging estimates that a sum of £733.2m could be lent via the sector when the final amunt is tallied up
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This will not only be the highest sum seen since the start of the pandemic, but it would also sit marginally above the 2019 total of £732.7m.
Apex: ‘Buyers turning to bridging to rescue transactions’
Chris Hodgkinson, managing director of Apex Bridging, said: “The landscape has become increasingly difficult, regardless of whether you’re purchasing as a homebuyer or investing for business purposes. As interest rates have climbed, many have found that when it comes to borrowing there simply aren’t the same deals on the table as there were previously.
“This has proved particularly problematic within the residential sector, with chain breaks being the predominant reason buyers are turning to bridging loans in order to rescue an otherwise scuppered transaction.
“While the benefits of bridging come with the compromise of higher rates, this hasn’t acted as a deterrent and we expect to see the sector finish strongly once the scores are on the doors for 2022 as a whole.”