Bridging sector expected to grow 33% over the next year

The UK bridging loans sector is expected to lend £2.7bn in 2014, according to a new survey from bridging lender West One Loans.

The survey, which polls over 250 financial intermediaries, revealed the average expectation among brokers is that gross bridging lending will grow by 33 per cent in the year to November, from £1.93bn in the previous 12 months.

A record net proportion – 38 per cent – of the advisers surveyed expect loan-to-values to rise in the next year, from the current average LTV of 42.8 per cent.

Bridging interest rates are expected to drop in the next 12 months, although the proportion of brokers expecting rate falls has shrunk in the past seven months. Presently the average rate is 1.22 per cent.

In March, the net proportion of intermediaries that expect to see a drop in bridging rates was 49 per cent, while in November it stood at 27 per cent, the lowest majority for a year.

West One Loans director Duncan Kreeger says: “Bridging has grown up over the course of the recession – just as most mainstream lenders wandered into troubled waters. Now that the economy is picking up, all forms of alternative finance are steaming ahead – and bridging in particular is making the most of the competitive advantage won in the dark days of recession.

“Looking at the figures so far this year, brokers’ expectations are looking pretty spot on. 2014 looks particularly exciting given how accurate the same predictions from intermediaries were a year ago.”