Shawbrook, the specialist UK savings, development finance, and bridging finance bank, has published its latest Bridging Market Bulletin. In collaboration with the Centre for Economics and Business Research (CEBR), this bulletin shows the current trends and outlook for the UK bridging finance market.
Demand for bridging finance has risen thanks to a buoyant auction market, following a good recovery after the initial UK lockdown. In September, the total amount raised was above the same month in 2019, by 38.8%. Compared to a year-on-year drop of 56% in April 2020, this shows how quickly the auction market has bounced back.
The Bridging Market Bulletin also notes that 53% of brokers have seen the demand for large refurbishment projects rise, such as HMOs and multi-unit blocks.
The current stamp duty holiday has also driven the market, as professional landlords have used bridging finance to secure properties ahead of the deadline in March 2021.
Emma Cox, Sales Director at Shawbrook Bank, said: “It’s been a difficult time for the property market, and of course the current landscape has left many facing challenges – especially within the bridging space, where some lenders had to halt business in this area for a period of time during the height of the pandemic.
It is positive to see many of these lenders recently return to market, and as our report shows, to see that the housing market is moving again.
Whilst some of this activity in the bridging market will no doubt be down to the releasing of pent up demand – something that Rishi Sunak’s stamp-duty holiday will support further – we are also seeing an uptick in investors looking at alternative strategies to sure up investments.
The use of bridging to carry out refurbishments and conversions, as well as to aid chain breaks due to elongated sales processes, is an essential funding option that can support lucrative investment opportunities.
We recently announced revised pricing across our bridging range, with rates now starting at 0.5% for both regulated and unregulated products, in order to show our continued appetite to aid brokers in making the most of these opportunities.
The bridging market has demonstrated remarkable resilience throughout this year and, as much as we may face more challenges towards the end of 2020 and into the early parts of 2021, we believe this adversity may create opportunities for investors, and brokers, which Shawbrook plans to continue to support as much as possible”.
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Earlier this month, Shawbrook acquired RateSetter’s development finance business. The lender also repriced rates across its range of bridging products, with rates now available from 0.5%.