The UK bridging finance market saw significant improvements and growth in the third quarter of 2024.
- Completion times for bridging loans have become quicker than any period since 2019, reducing to an average of 46 days.
- Lending volumes increased, with gross lending from contributors reaching £220.8 million.
- There was a notable rise in investment purchases as bridging loan uses climbed from 18% to 24%.
- Both regulated and unregulated refinance demands peaked, while chain-break loans saw a reduction.
In the third quarter of 2024, the UK bridging finance sector reported faster completion times, dropping to an average of 46 days from the previous quarter’s 52 days. This marks the swiftest rate the sector has witnessed since 2019, indicating a significant enhancement in processing efficiency that many in the industry consider beneficial.
Moreover, this period saw gross lending volumes from contributors climb to £220.8 million, reflecting an overall uptrend in the market’s lending activity. Such an increase not only highlights the sector’s expanding capacity but also underscores the growing confidence among borrowers and lenders alike.
A noteworthy shift took place in the composition of bridging loan purposes. Investment purchases led again, now constituting 24% of the quarter’s loans—a notable rise from the prior quarter’s 18%. This change signals an increasing tendency among property investors to leverage bridging finance for acquiring new assets, pointing to a heightened level of activity in the property sector.
Additionally, demand for refinancing reached unprecedented levels. Regulated refinance surged from 6% to 14%, and unregulated refinance from 6% to 13%. This surge suggests that borrowers are increasingly turning to bridging finance as a viable option for managing and reorganising their financial commitments efficiently.
In contrast, there was a decline in chain-break loans, which indicates a stabilisation within the market. Such movements reflect a shift in borrower focus towards more strategic financial planning and pursuit of stability rather than merely addressing immediate financial breaks.
Chris Oatway from LDN Finance recognised the improvements in the sector’s efficiency, noting that faster completion times signify a more efficient market. Shane Chawatama from Knowledge Bank remarked on the enduring popularity of bridging finance, accentuating the increased interest in second charge bridging and adverse credit. This attention to flexible options is crucial amidst ongoing economic uncertainty.
Gareth Lewis from MT Finance highlighted the implications of reduced completion times, suggesting a cohesive effort from the market to streamline processes. This streamlining is particularly remarkable during a season when market activity traditionally slows. The rise in lending volumes and shortened turnaround times, he noted, are indicative of a robust processing mechanism that meets the evolving needs of borrowers.
The bridging finance sector’s third-quarter performance portrays a dynamic ecosystem with enhanced efficiency, increased lending, and evolving borrower priorities.
