Gross bridging lending was forecast to hit £1.5bn by the end of 2012 and continue an upwards trend over the course of 2013.
Fincorp director Nigel Alexander says projections such as these fuels the myth the industry can keep growing exponentially without a deterioration in lending criteria.
He says: “The danger is that every man and his dog thinks he can be a bridging lender and make pots of money. Investors are baying for more business and lenders without experience are taking the money and fuelling the myth that the bridging market can keep growing and growing.
“Well it can. But only because inexperienced lenders start to relax their criteria to get the loans out. We saw that out of control competition in the frothy days of the mortgage market and ultimately it’s the borrower who pays for lender greed. Bridging industry professionals should take a care not to fall into that damaging cycle.”
The Association of Short Term Lending’s figures for 2012 show the total amount originated over the course of the year fell short of this £15.bn projection, instead totalling £1.054bn.