2021
The first quarter of 2021 has seen a dramatic increase in the volume of bridging loans in the UK, with a 68% increase compared to the same period in 2020. This is according to a report from Apex Bridging, one of the UK’s leading bridging loan providers.
Bridging loans are short-term finance solutions designed to bridge the gap between a property purchase and a longer-term loan. They are typically used by property developers and investors who need to move quickly on a purchase or sale, and can be secured against a range of assets.
The increase in bridging loan volume is being driven by a number of factors. Firstly, the UK housing market has been booming since the start of 2021, with house prices rising at their fastest rate since 2016. This has led to increased demand for bridging loans, as investors and developers seek to take advantage of the favourable market conditions.
Secondly, the UK government has introduced a range of measures to support the housing market, including a stamp duty holiday and the Help to Buy scheme. These measures have made it easier for people to purchase property, and have encouraged more people to enter the market.
Finally, the availability of bridging loans has increased significantly in recent months. This is due to more lenders entering the market, as well as increased competition between existing lenders. This has led to more competitive rates and more flexible terms, making bridging loans more accessible to a wider range of borrowers.
The increase in bridging loan volume is good news for the UK housing market, as it suggests that there is strong demand for property purchases. It also suggests that lenders are confident in the market, and are willing to provide finance to borrowers.
However, it is important that borrowers take care when taking out a bridging loan. These loans are typically more expensive than other forms of finance, and borrowers should make sure they understand all the terms and conditions before signing up. They should also ensure they have a plan in place for repaying the loan, as failure to do so can result in significant financial penalties.
Overall, the increase in bridging loan volume is a positive sign for the UK housing market. It suggests that there is strong demand for property purchases, and that lenders are willing to provide finance to borrowers. However, it is important that borrowers take care when taking out a bridging loan, and ensure they understand all the terms and conditions before signing up.