The total amount of funds lent via bridging loans dropped by 22.5% in the fourth quarter of 2022, according to new analysis from Apex Bridging.

Figures showed that £166.3m was lent via the bridging sector during Q4 last year.

However, Apex Bridging’s analysis also revealed that this total was 14.4% higher than Q4 2021, when £145.4m was lent.

According to the figures, bridging loans have become increasingly popular. Apex Bridging analysed the latest Bridging Trends survey by property lender MT Finance, and highlighted that total gross lending hit £716.2m in 2022, a 14.3% increase compared to 2021. The latest total is also 57.4% higher than 2020, when the COVID pandemic caused a notable reduction in market activity.

Furthermore, the findings from this survey showed that during Q3 last year, residential homebuyers looking to overcome chain breaks were the predominant borrowers driving bridging loan lending.

However, while they remained the second most prominent consumer segment in Q4, accounting for 15% of all lending, property investors have utilised the bridging sector to the greatest extent and account for 26% of all borrowing. Refurbishment also accounted for 14% of all lending, while unregulated finance, popular with intermediaries, investors and developers, accounted for 10% of all lending.

“There’s no doubt that the market turbulence seen during the closing stages of last year continued to influence bridging trends, with homeowners suffering chain breaks remaining a significant consumer segment, while the average interest rate available climbed to its highest level since the second quarter of 2019 in line with the wider market,” said managing director of Apex Bridging, Chris Hodgkinson.

“The average time to complete an application has also increased notably to 66 days, which reflects the more difficult landscape facing bridging lenders, although it remains a very fast route to securing finance for those who require fast cash.

“What’s also clear is that while the market may have cooled, confidence amongst investors and developers remains strong. Investment purchases accounted for the highest proportion of lending, with refurbishment also a driving factor for borrowers, which suggest that those utilising bridging loans within a professional capacity are getting their house in order for the year ahead.”

Share Story: