Specialist lender lists seven reasons why bridging is booming
The UK bridging loans market is poised for further expansion after a strong finish to 2024, with overall loan books expected to reach £12.2 billion by the end of this year, according to West One Loans.
The property finance specialist noted that bridging completions reached a record £2.3 billion in the final quarter of 2024, based on figures from the BDLA. This marked a 28.6% rise compared to the previous quarter, lifting the annual total to £7.34 billion, up from £5.76 billion the previous year.
Following this surge, the total bridging loan book surpassed £10 billion for the first time, finishing 2024 at £10.3 billion. The lender projects that bridging completions could climb to £9.46 billion in 2025.
West One Loans outlined seven key drivers behind the sector’s growth, highlighting speed, flexibility, and broad applicability as major factors.
Speed and opportunity were noted as essential. Bridging loans were arranged within an average of 38 days in the fourth quarter of 2024, allowing buyers to move quickly on opportunities, such as acquiring properties deemed unmortgageable by traditional lenders.
Flexible lending criteria and the range of uses were also highlighted. Bridging lenders often prioritise asset value and exit strategy over credit scores and offer funding for various purposes, including business needs, tax obligations, debt restructuring, and refurbishment projects.
The firm also pointed out that bridging loans provide short-term solutions for buyers needing immediate funds before finalising property sales or renovations.
Another factor why the lender believes the bridging sector will continue to grow this year is that some lenders offer higher loan-to-value (LTV) ratios, with up to 75% available, making it easier for borrowers to access larger sums.
Borrowers can also benefit from customisable terms, negotiating repayment structures that better match their needs, providing greater flexibility compared to traditional loans.
The wide accessibility of bridging finance, available to homeowners, landlords, developers, and businesses, has also supported the sector’s momentum, West One Loans said.
Finally, the lender underlined that having a clear exit strategy — such as refinancing or selling a property — can mitigate risk for bridging borrowers.
“We’ve seen an incredible level of growth across the bridging sector over the last year, and this really highlights the vital role the sector plays within the UK property market, particularly as the landscape has become increasingly more turbulent and interest rates have climbed,” said Thomas Cantor (pictured), co-head of short-term finance at West One Loans.
“It’s fair to say that bridging has very much become a mainstream product and a vital tool in a developer’s armoury. This is down to the many benefits the sector offers, not least the speed and flexibility a bridging loan can offer when securing short-term finance, as well as the fact that there are no early repayment penalties.
“It’s these benefits that are enabling everyone from property developers to landlords and homeowners to business owners to progress with their plans without the restrictions that come via a more conventional lender, and we only anticipate that this current trend will intensify over the coming year.”
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