West One Loans Bridging Finance Index
Research from West One Loans, who claim to be the largest privately funded bridging lender in the UK, shows that demand for bridging finance surged to £911m. Here are the mains points from their press release:
- Gross bridging lending in 2011 was 110% higher than in 2010
- The average loan size was 28% higher than last year
- The growth is being driven by Buy-to-Let lending
- The market has shifted away from commercial lending to residential.
Duncan Kreeger, Chairman of West One Loans, said:
“Buy-to-let is the horse pulling the cart, and it’s driving the bridging industry forward at a rate of knots. The first time buyer mortgage famine means a feast for property investors. Rents are high, property prices are deflated, and that has created a vibrant rental market that investors are piling into.”
“Despite banks increasing the number of buy-to-let mortgages, they have been unable to keep pace with the proliferation in demand. Buy-to-let lending is still very low by historic standards. In 2011 there were only 124,000 buy-to-let loans, compared to 346,000 in 2007. As a result more landlords are using bridging loans to finance the development of properties they can’t get mortgages on. Demand for bridging loans is sky high, and will continue to push towards the stratosphere in 2012.”
Up To 90% L-T-V For Bridging Finance
Sounds incredible, but Federal Bridging Bank are introducing a bridging loan product offering up to 90% loan to value. The product will be available nationwide and is being pitched as filling a gap in funding for property deals outside of the M25 and Manchester areas.
There are reports that £40m has been put aside for lending and that a team has been put together to manage the loan book.
The Bridging and Commercial website carried the story in late Feb as an exclusive but the news has now appeared on various other sites.
OFT to revoke the license of Bridging Loans Ltd
The Office of Fair Trading has decided to revoke the license of Glasgow based lender Bridging Loans Ltd. along with four associated companies.
Bridging Loans Ltd can continue trading until an appeal has been determined, however they have pointed out to the press that although regulated lending is not a major part of their business they are appealing.
In November 2010 the FSA fined the firm £42,000 for failures relating to lending practices.
And now for a quick round up of other Bridging Finance news
Bridging Rates Going Down?
Is a price war looming in the Bridging Finance Market? Various lenders are reporting cuts in rates, but are these just headline grabbing PR stunts?Lets start with three announcements of "cuts’ in bridging rates.
Storified by Chris Clarke · Thu, Mar 29 2012 03:15:04