Bridging loan returns outstrip rival investments

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Bridging loans gave investors higher annual profits than rival alternative investments such as art and fine wine, according to new research from short-term lender West One Loans.

Private investors in short-term loans saw an average annual return of 10.6 per cent in the twelve months to 1 September 2015.

Bridging loan investors would have seen a £500,000 investment rise to £553,000 in the period, while the same figure invested in fine art would have only seen a 3 per cent rise to £515,000.

Meanwhile a £500,000 investment in fine wine would increase only 2.19 per cent to £511,000 over the year to 1 September 2015.

West One loans director Duncan Kreeger says: “Investors are waking up to the full potential of alternative investments and bridging loans in particular, which consistently offer investors greater returns and stability than the likes of gold, wine and art.

“We expect this trend to endure as we continue to work closely with intermediaries to make sure that they are aware of the potential of the bridging market.”

Bridging loans have outpaced other alternative investments for at least the past two years.

Bridging loans gave an average yield of 10.5 per cent for the 2014 full year, while fine art gave returns of 5.3 per cent and fine wine investors bore a loss of 16.5 per cent.

Investors in bridging loans saw returns of 10.8 per cent for the 2013 full year, compared to 5.1 per cent for fine art and one per cent for fine wine.