Bridging loan transactions reached a new high with £831m in deals in 2023, a 16% increase from the previous year, as reported by Bridging Trends. The first quarter saw a significant £278.8m in loans, driven by borrowers seeking alternatives due to uncertainties in the mortgage market.
The second quarter experienced a dip to £165.7m, attributed to concerns over inflation and mortgage rates, but the market recovered in the second half of the year. The main use of bridging loans was for preventing chain breaks, making up 22% of all loans.
The market saw a rise in regulated bridging loans, making up 46.3% of the market, influenced by higher interest rates and the withdrawal of mortgage products. However, the demand for second-charge lending reached a record low, reflecting a shift in borrower priorities.
Dale Jannels, managing director at Impact Specialist Finance, said: “It’s no surprise to see an overall increase in bridging volumes in 2023 and it reflects what we have seen, especially the increased use of regulated bridging.”
Matthew Dilks, bridging & commercial specialist at Clever Lending, remarked: “What’s encouraging has been the number of brokers who have used us for bridging for the first time.”
Andre Bartlett, director at Capital B Property Finance, stated: “The record-breaking £831m transacted in 2023 signifies a significant 16% increase from the previous year, demonstrating the increasing reliance on bridging finance within the property sector.”
Gareth Lewis, managing director at MT Finance, commented: “As a sense of stability returns to the mainstream mortgage market, my hope is that borrowers continue to utilise bridging’s versatility for everything from unlocking equity to funding an auction purchase.”
