More brokers are turning to bridging finance – why?

See our award-winning bridging products here. 

By Mia Colgan, Business Development Manager

It feels like you can’t move for a record month of something at the moment. 

Following our 100 completed deal March, we saw the highest number of applications ever in May for our bridging products. 

The reasons for this are no mystery. Property investors want the rate market to normalise, or to at least become more stable. 

What we’re seeing is both A) A reflection on how easy our portal is to use and B) The trend across the market. 

Official figures showed the first quarter of 2023 was an all-time record for the value of bridging finance. 

Here are some key stats from Financial Reporter about what’s been happening in the market recently:- 

• Bridging lenders transacted £278.8 million in bridging loans in the first quarter of this year, a 30% increase on the previous record
• This was driven by demand in the residential homeowner market
• Regulated bridging demand rose compared to the end of 2022
• Bridging loans to purchase investment assets fell to a new record low of 15% in Q1.

Why is this happening? 

The fall in the proportion of bridging loans being used to purchase investment assets – despite a record month – is very illuminating as to just how much the sector has shifted. 

These assets would typically be higher value ones, so to see a record amount transacted with this fall tells us a lot of brokers – and potentially new brokers – are looking for different types of bridging to what they are traditionally used to. 

Sadly, as well, there are likely to be more auction purchases happening at present given the market and increase of distressed units. According to government stats, in the first three months of this year, there were 4,085 mortgage possession claims and 718 repossessions, an increase of 40% and 24% respectively on the same quarter last year. 

Residential customers need the speed and flexibility of bridging more and more, for chain breaks, refurbishment, or a potential way to avoid getting into longer fixed-term mortgages while they wait for rates to drop. 

What this means for brokers

What our team has been noticing is lots of brokers wanting information about the bridging market who have never used the product before. 

This is because they are looking for creative solutions for their customers in a challenging period, where the reasons to use bridging are increasing: 

• Annual rates not too much more expensive than long-term lending at the moment, with the added flexibility of exiting when you want with no fee
• No tick box approach with lenders working with brokers to get the deal done, speaking to BDMs with a mandate is another big plus
• Homeowners looking to invest in their homes to increase values
• Lending off of market value

For brokers using bridging for the first time, the right step is to probably use one with a portal so simple its bridging team recently won an award…

Register for our award-winning bridging products here. 

LendInvest Loans Limited is a company registered in England & Wales with Company No. 09971600.

LendInvest Loans Limited is authorised and regulated by the Financial Conduct Authority (FRN:737073). LendInvest Loans Limited is a wholly owned subsidiary of LendInvest plc.

Borrowing through LendInvest involves entering into a mortgage contract secured against property. Your property may be repossessed if you do not repay your mortgage in full.

LendInvest plc is a public limited company registered in England and Wales (No. 8146929). Registered Office: 8 Mortimer Street, London, W1T 3JJ.

For borrowers, borrowing through LendInvest involves entering into a mortgage contract secured against property. Your property may be repossessed if you do not keep up repayments on your mortgage.