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UK Bridging Loan Market Sees Record Growth in Q2 2024
UK
Bridging
Loan
Market
Sees
Record
Growth
in
Q2
2024
In the second quarter of 2024, the UK bridging loan market reached a total of £201.8 million, reflecting a 2.9% increase from £196.2 million in the first quarter. This figure represents the highest amount recorded for Q2 since tracking began in 2015.
The surge in bridging loans can largely be attributed to borrowers aiming to avoid chain breaks, which now account for 23% of all loans, up from 19% in the previous quarter. This trend highlights ongoing challenges in the mainstream mortgage sector, particularly related to conveyancing delays.
Moreover, demand for auction finance experienced a notable uptick, rising from 9% in Q1 to 14% in Q2. This increase suggests that more buyers are taking advantage of undervalued properties within a relatively stagnant housing market.
The growing interest in bridging loans—especially for preventing chain breaks and making auction purchases—has coincided with a decrease in average processing times, which improved from 58 days in Q1 to 52 days in Q2.
Additionally, the portion of unregulated bridging loans rose from 49% to 54.2%, indicating a shift among investors and landlords as they navigate the current economic landscape.
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