The UK bridging finance market has seen the value of completions soar by +28% on the year and nearly one in five deals are being used to help break chains.
New research from Excellion Capital reveals that significant quarterly and annual increases in financing – especially in the commercial sector – mean that bridging lending in the UK is booming with all signs pointing towards further increases in the coming months.
An analysis of The Bridging & Development Lenders Association data reveals that the estimated total value of bridging market completions in the UK in Q3 2024 came to £1.79 billion. This marks a quarterly increase of +2.9% and an annual increase of +27.9%.
While the main reason for using bridging finance is for investment purchases (24%) nearly one in five (17%) of bridging deals are used for chain breaks, while 14% has gone towards regulated refinance.
LARGELY STATIC
The annual bridging lending increase of +27.9% has come despite the fact that the average interest rate on a bridging loan has remained largely static over the course of the past year, showing only the slightest decrease of -0.02% annually to sit at an average rate of 0.92% in Q3 2024.
APPETITE INCREASING
Ashley Marks, Head of Real Estate at Excellion Capital, says: “Any sign that the appetite for bridging finance is increasing indicates that there’s a growing confidence in UK investment and development.
“It suggests that developers and backers alike feel secure that issuing short-term loans will help development projects get over the line and loans will be successfully repaid. If market confidence was low, people would consider the risk of bridging too high and numbers would be declining.
“We fully expect the appetite for bridging to keep growing over the coming months and into next year.”
