Buy-to-let demand results in 110 per cent rise in Bridging Finance lending
Gross lending in bridging finance rose to £911million in 2011, according to the latest quarterly Bridging Index from West One Loans.
This is a 110 per cent year-on-year increase which resulted in lending surpassing the projected forecasts by the previous Bridging Index by more than £100million.
Buy-to-let business has been cited as the primary reason for this staggering increase.
Despite the influx in the buy-to-let deals appearing on the market, demand is still failing to be met. With landlords desperate to add to their property portfolio whilst the rental market remains vibrant, this previously niche funding tool is now being utilised to bridge the gap as the Chairman of West One Loans, Duncan Kreeger, comments:
“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.”
Last year the number of bridging loans rose by 62 per cent with net lending increasing by 67 per cent.
Content correct at time of publication