The volume of bridging loans increased by nearly a third in the first quarter of 2018 according to the latest Broker Sentiment Survey.
The survey asked 119 brokers about their bridging lending views with 30% of them saying that they had experienced a rise in bridging loan volumes.
Demand for bridging finance is high, and this has attracted more brokers and lenders to enter the bridging finance market. Of the brokers surveyed, 37% cited competition as the main issue that they face in 2018.
Interest rates and pricing were the main reasons why many borrowers choose a lender, but sometimes flexibility and speed can be the deciding factor. None of the brokers want to see a rise in interest rates, but 26% wanted increases in the time taken to complete bridging loans.
Higher loan to values were wanted by 42% of the brokers and 27% said that more flexible lending for commercial loans was needed.
The most popular reasons for bridging finance was to fund property development, with 27% of the total being for development in 2018 compared to 19% in the last quarter of 2017. The second most popular reasons were to buy an investment property at 24%, followed by refurbishment at 21%.
Many borrowers use bridging finance as a short-term tool whilst waiting for more long-term loans to be arranged.
Bridging finance used to be regarded as a niche financial product but is now a viable financial product seen as mainstream.