What will 2018 hold for bridging loans?
The bridging finance market enjoyed success in 2017, with £4.7bn lent in the third quarter of the year.
Most financial experts believe that 2018 will continue to be a good year, with a high demand for bridging finance. This is despite the uncertainty of Brexit.
It is expected that there will be a rise in specialist lenders, especially those who can assess complex lending deals that many larger financial organisations will not deal with. Specialist lenders are flexible and look at each loan application individually, rather than having a fixed set of criteria when assessing loans.
The housing market could experience a period of growth with more houses being sold. This could fuel a demand for bridging loans that are used to complete house sales.
The government is encouraging new house building and this will mean a high demand for funding from developers. Bridging finance is particularly useful for developers with more than one project. Bridging loans can be provided to start a new project before the property has been sold on an existing development.
Another area that is expected to grow is the provision of bridging finance for property refurbishment.
As property in London and the South East increases in price and rental yields remain low, many investors and landlords are looking outside of these areas to purchase and develop property. Manchester, Liverpool, Leeds and Birmingham are popular areas, as property is not too expensive and rental yields can be higher than in London and the South East.