During the period from 2007 to 2017 the total value of bridging loans lent has tripled to over £3bn, according to a January 2018 MortgageStrategy.co.uk article.
In 2007, bridging lending was a niche market, used mainly to bridge the gap between buying a new home and selling an old one. Bridging finance is still used for this purpose, but the uses for it have grown. For example, Borrowers regularly use bridging finance to purchase property at auctions, or to fund refurbishment work on property.
In 2007, there were just a few bridging lenders, most of which were private organisations. Now. there are many more lenders, from small specialist ones to large banks listed on the FTSE 250.
A few years ago, it was difficult to find a bridging loan at around 2% a month interest. Now, rates as low as 0.5% can be found.
In 2007, not all lenders had a good reputation. Today, bridging finance lenders are seen as professional, reputable and a valued source of investment funds. Lenders have created more complex and sophisticated products to meet borrowers evolving needs.
Bridging has grown because of its flexibility. It has adapted to the changing requirements of borrowers. By increasing the uses of bridging finance, it has expanded into new markets. The future growth of bridging finance could be fuelled by new emerging markets for short-term loans.
Bridging loan brokers have also become more professional and are able to negotiate good loan deals for borrowers.
