Property development continues to boom, with lenders seeing a 22 per cent increase in the value of bridging development loans in the first quarter of this year.
Figures from the Association of Short Term Lenders show that £386.1m of development loans were arranged in these three months, of which £242.2m were categorised as bridging loans.
This is an increase of 22 per cent on the previous quarter, highlighting the growing trend for property developers to rely on short term lending solutions.
The ASTL said these were typically taken out to arrange short-term finance to secure a property or refurbish it.
These development loans exclude what is generally termed “light refurbishment” such as the addition or renovations of bathrooms, kitchens and conservatories as these generally do not require planning permission or extensive structural changes.
ASTL chief executive Benson Hersch says: “The role of small and medium building firms are seen as crucial in helping solve the housing crisis but access to finance still remains their toughest barrier to overcome.
“While smaller building firms continue to be locked out of mainstream channels they will increasingly rely on different sources of finance.”