Shawbrook Bank, in collaboration with the Centre for Economics and Business Research (CEBR) has delivered a snapshot of the latest trends and outlook for the UK bridging finance market.
The ‘Bridging Market Bulletin’ reveals encouraging signs of activity returning to the bridging market as investors look to add value or yield. This optimistic picture is reinforced by recent state of the market data from the ASTL1 which showed bridging applications hit their highest ever level in Q3 2020, and completions rose by more than 40% as the market bounced back following the first lockdown.
In an analysis of the market, Shawbrook observes the trends driving demand:
Commenting on the state of the market, Emma Cox, Sales Director at Shawbrook Bank said:
“It’s been a difficult time for the property market, and of course the current landscape has left many facing challenges – especially within the bridging space, where some lenders had to halt business in this area for a period of time during the height of the pandemic. It is positive to see many of these lenders recently return to market, and as our report shows, to see that the housing market is moving again.
Whilst some of this activity in the bridging market will no doubt be down to the releasing of pent up demand - something that Rishi Sunak’s stamp-duty holiday will support further - we are also seeing an uptick in investors looking at alternative strategies to sure up investments. The use of bridging to carry out refurbishments and conversions, as well as to aid chain breaks due to elongated sales processes, is an essential funding option that can support lucrative investment opportunities. We recently announced revised pricing across our bridging range, with rates now starting at 0.5% for both regulated and unregulated products, in order to show our continued appetite to aid brokers in making the most of these opportunities.
“The bridging market has demonstrated remarkable resilience throughout this year and, as much as we may face more challenges towards the end of 2020 and into the early parts of 2021, we believe this adversity may create opportunities for investors, and brokers, which Shawbrook plans to continue to support as much as possible”.
3 A Shawbrook poll of brokers, October 2020