Lending data supports this claim
Almost half of brokers working in the specialist lending market think that development finance is now “hotter” than the bridging loan market, a survey conducted by property finance lender TAB discovered.
While two in every five brokers (38%) told TAB they thought the bridging loan market was still most in demand, nearly half (46%) told the lender that it was the development finance market, while one in seven (15%) of those polled weren’t sure.
TAB polled the views of industry brokers at an event to mark the opening of its new headquarters in Hertfordshire.
TAB said that their lending data supports what brokers are saying. In 2021, bridging loans represented 80% of the value of the lending enquiries. In 2022, this dropped to 64%. Similarly, development finance accounted for 13% of the enquiries in 2021, compared to 31% since the start of 2022.
Read more: The lender’s view, by Dani Netzer: Development finance in 2022.
Duncan Kreeger, founder and chief executive of TAB, said that the bridging market had been buoyant since 2005, but it took off in the wake of the credit crunch in 2007–2008.
“We’re now just beginning to see the development finance space take over. We are seeing more and more interest from brokers looking for fast, short to medium term access to capital on behalf of clients who need to finance the construction, conversion, and refurbishments of property projects,” Kreeger said.
A record number of planning applications for extensions and home improvements were approved last year. According to the latest official planning statistics, in the 12 months to the end of last September, 247,500 consents were granted in England, 36% higher than the number signed off in the year before - and a fifth above the pre-pandemic norm.
