Brokers expect to do more bridging business this year

Mortgage brokers are expecting to write more bridging business this year than last, according to research by West One Loans.

On average brokers expect their bridging business to grow by 27% in the next 12 months, a figure which rises by 33% for those who specialise in bridging business.

The poll also reveals that 63% of brokers say they are currently writing more bridging loans than they did a year ago. Some 28% are writing a similar number of loans and 9% are writing less.

Overall, brokers are writing 28% more bridging loans than a year ago, with one in ten saying the volume they have written has more than doubled in the last year.

Duncan Kreeger, chairman of West One Loans, says: “The bridging industry has grown rapidly since 2010. Net lending is up 56%, which makes the mainstream market look turgid by comparison, and the rate of growth shows no signs of slowing.”

He adds that this year will be a testing one for mainstream lenders, meaning buy-to-let investors will be likely to turn to bridging to finance their projects.

The research also shows that 67% of brokers believe interest rates on bridging loans will either stay the same or fall in the next six months.

However, some 46% of respondents said that new lenders which have entered the bridging sector recently have not made any positive impact on the market.

Kreeger says: “Professionalism in the industry has come on leaps and bounds in the last few years, but inevitably there are the more unscrupulous types who see bridging as little more than a cash cow to be plundered in the short term.

“They offer misleading headline rates, hoard proc fees and attract negative press to bridging as result. We need to make it clear there is no room for these sorts of characters in the industry.”