Over the past year bridging loans have seen a surge in popularity, with search trends revealing an 18% increase in searches for ‘bridging loans’ compared to the previous year.
Research by John Charcol found that in February, the average monthly search volume for this term reached 5,200, marking the highest monthly search volume in five years.
Searches for ‘bridging loan calculator’ have also risen, indicating a growing interest in this form of high-interest emergency loan.
Nicholas Mendes (pictured), mortgage technical manager at John Charcol, said: “The demand for products within the specialist market has increased over the last few years – partially due to the pandemic, but also because clients have become more accustomed to different lenders and forms of borrowing than previously.”
Mendes notes that the market’s growth is likely to continue as homeowners find themselves locked into long-term, low fixed rates and face tightened lender affordability.
John Charcol itself has experienced an increase in regulated bridging loans as homeowners seek to avoid costly chain breaks or downsize while their property is on the market.
The market is currently in flux, with many buyers looking to place bids below the selling price due to the anticipated property dip of 8-10%.
The shift from a sellers’ market to a buyers’ market makes bridging loans a valuable option for sellers, allowing them to release equity from their property to secure an onward purchase while trying to sell their house.
