Demand for housing should keep bridging in good health during the Brexit talks, which in turn will help the economy
Demand for bridging loans is the highest since 2012, according to the last set of quarterly figures from our members. The year-on-year increase of 123 per cent was unprecedented – and unexpected.
Of course, my usual caveat is that brokers sometimes send an application to more than one lender, and some applications do not stand up to scrutiny, so only a small proportion of these are likely to turn into loans. Nevertheless, despite everything going on in the UK right now, confidence remains high.
The big question is: for how long? Every quarter I expect the figures to show signs of evening out but I am surprised by yet another rise.
The biggest upcoming factor is likely to be the result of the general election, and its impact on Brexit. It is inevitable there will be bad news as well as good over the next two years of negotiating with the EU; it is clear already that it will not all go in our favour.
What would be helpful following the election, regardless of which party wins, is for our politicians to take the same pragmatic stance as many businesses: accept the ups and downs of the difficult Brexit negotiations, work together, and hope for the best outcome while planning for the worst.
High-cost London property continues to be affected by a lull in overseas investment, but the dip in property prices is no bad thing. Meanwhile, people in the rest of the country are experiencing a less volatile market.
With the current shortage of housing for sale, developers will continue to take advantage of the opportunity to build where and when they can. This, in turn, could ensure a continued rise in both the bridging and mainstream mortgage markets, regardless of the result of the election, and of Brexit.
Benson Hersch is chief executive of the Association of Short Term Lenders